4 ms·
May I ask about ROI and profit margin for the restaurant business?
by Maven911 9y ago
May I ask about ROI and profit margin for the restaurant business?
- elchief 9y agoIf you make it, you make it big. My place makes $1M in revenue and ~10% profit But if you don't blow up, the rent will kill you. My friend ran a good place, but it wasn't busy enough to pay the $30k/month rent
- toomuchtodo 9y agoYou mention it only cost you 40k to get started; how long did it take to reach $1MM in revenue/10% profits?
- elchief 9y agoWe did that in our 3rd year
- rootsudo 9y agoIs 10% profit considered good? That seems to be a lot of work to just net 100k. Is that net and your take home?
- pc86 9y agoIt's not truly net unless he's paying himself a market rate for the amount of work he's doing (which if he's a programmer, may very well be $0 if everything is run by staff). 10% margin seems great for a restaurant, especially if that's after paying the owner. I've worked in management in restaurants (diners, nothing fantastic but a great way to help pay for school) and profit margins in the low-to-mid single digits before paying the owner is not uncommon.
- cossatot 9y agoThe economist and food critic Tyler Cowen often writes that the best food is typically in low-rent areas for precisely this reason. If fixed costs are low, then the restaurant can afford to focus on the quality of the food a bit more. This is particularly true for many varieties of ethnic food, where the restauranteurs may be immigrants without a lot of money to put up, but a rich knowledge of the food from their home country.
- baby 9y agoYou see that a lot in Chicago were good restaurants are often found in weird parts of the city (I'm looking at you 42 grams)