4 ms·

Restaurants and mom and pop grocery stores/convenience stores are very low margin, super long hours, and stressful. Furthermore, it isn’t just places like Grubh

Restaurants and mom and pop grocery stores/convenience stores are very low margin, super long hours, and stressful. Furthermore, it isn’t just places like Grubhub but also local governments with weird zoning laws and expectations that really exploit these businesses with random fees. (My parents had a grocery store. They lost it during the previous recession.)

tick_tock_tick 6y ago
My statement might have come across as harsh I understand that these kinds of businesses take a huge amount of blood, sweat, and tears; Especially since the ROI is often not really that great. It takes all the energy you have to run just the shop let alone comply with the city, county, state, and country regulations, source inventory, promote yourself, etc. It doesn't surprise me they are getting exploited with the overwhelming mountain of stuff they need to manage. The small margins mean it's very hard to hire staff to distribute work too.
rahimnathwani 6y ago
Restaurants and grocery/convenience stores are a bit different. Yes, owners of both are signing up for long hours and poor pay. But the motivation is often different: - if you buy or start a grocery store, you know you're buying yourself a job; you won't get rich, but you will make more money than you would working for someone else, e.g. if your options are limited due to discrimination, lack of fluency with local language, literacy etc. - if you open a restaurant, you might me doing it for all the same reasons as above (think an undifferentiated Chinese restaurants, or a local pizza place). But many people open restaurants because they are into food, because they think the way they make food is better than existing restaurants, and because they think the margins are going to make the restaurant ultra-profitable. (My parents also had a grocery store.)
BeetleB 6y ago
> Restaurants and mom and pop grocery stores/convenience stores are very low margin, super long hours, and stressful. Sorry to hijack off of your comment - none of what I say is meant as a negative about you or your parents. I've seen two types of people start these: 1. People from low income backgrounds who don't have many other options and don't have the means to gain good knowledge. I sympathize with them. 2. People who are somewhat wealthier (have a good degree, work for an engineering company, etc) who complain about how poorly people are running restaurants and how poor the food is and know for certain that they can run a restaurant that makes the food really well and everyone will come to their restaurant and business will be good. Very common for this to be about ethnic restaurants but doesn't need to be. I have little sympathy for this group. They really should know better. I've talked to them about it before they put a huge chunk of their savings into starting a restaurant. They typically do no background research. They don't ask other business owners. They have no idea about the margins (hint - the other restaurants who make food poorly do it for an economic reason - not because they can't find good chefs). Recently one of them opened a restaurant near my home. And their food was great - I would put it in the top 2 of their category in the city. But their prices were too high. Normally I order this type of food once in a while when I don't want to cook or am busy. But the price was beyond that threshold. I went there only when special friends visited me in town and took them there. And not many people went there. The reviews everywhere (Yelp, etc) were awesome. But people didn't go there. Partly because of prices, but partly because of the location. Why did they pick that location? Because there's a big company in the neighborhood. Surely there are plenty of well paid people there who would come for lunch? Yes there are and no they won't. Over the years living there I know this plaza well. It's a graveyard for restaurants - most of them likely relying on employees of that company eating there. All these guys had to do was spend time in the restaurants in that plaza prior to signing the lease to get an idea. "Ah, but they don't go to those restaurants because their food is crap!" Yes, the food is crap. No, that's not the reason. And then there's the food. Great food they made. But they weren't making a profit. So did they revise their menu to focus on items that would give good margins? No. They raised the prices. Fewer people came. They raised the prices again. Even fewer people came. This spiraled out of control. Within a year they had shut down. One of the co-owners told me there wasn't a month where they made a profit. I asked "Did you talk to any restaurant owners for their advice prior to opening?" Nope. If the food is great, people will come. These guys work (or worked) pretty good jobs prior to opening the business - sometimes in senior management roles. Is that how decisions were made at their companies?

tick_tock_tick 6y ago

My statement might have come across as harsh I understand that these kinds of businesses take a huge amount of blood, sweat, and tears; Especially since the ROI is often not really that great. It takes all the energy you have to run just the shop let alone comply with the city, county, state, and country regulations, source inventory, promote yourself, etc. It doesn't surprise me they are getting exploited with the overwhelming mountain of stuff they need to manage. The small margins mean it's very hard to hire staff to distribute work too.

rahimnathwani 6y ago

Restaurants and grocery/convenience stores are a bit different. Yes, owners of both are signing up for long hours and poor pay. But the motivation is often different: - if you buy or start a grocery store, you know you're buying yourself a job; you won't get rich, but you will make more money than you would working for someone else, e.g. if your options are limited due to discrimination, lack of fluency with local language, literacy etc. - if you open a restaurant, you might me doing it for all the same reasons as above (think an undifferentiated Chinese restaurants, or a local pizza place). But many people open restaurants because they are into food, because they think the way they make food is better than existing restaurants, and because they think the margins are going to make the restaurant ultra-profitable. (My parents also had a grocery store.)

BeetleB 6y ago

> Restaurants and mom and pop grocery stores/convenience stores are very low margin, super long hours, and stressful. Sorry to hijack off of your comment - none of what I say is meant as a negative about you or your parents. I've seen two types of people start these: 1. People from low income backgrounds who don't have many other options and don't have the means to gain good knowledge. I sympathize with them. 2. People who are somewhat wealthier (have a good degree, work for an engineering company, etc) who complain about how poorly people are running restaurants and how poor the food is and know for certain that they can run a restaurant that makes the food really well and everyone will come to their restaurant and business will be good. Very common for this to be about ethnic restaurants but doesn't need to be. I have little sympathy for this group. They really should know better. I've talked to them about it before they put a huge chunk of their savings into starting a restaurant. They typically do no background research. They don't ask other business owners. They have no idea about the margins (hint - the other restaurants who make food poorly do it for an economic reason - not because they can't find good chefs). Recently one of them opened a restaurant near my home. And their food was great - I would put it in the top 2 of their category in the city. But their prices were too high. Normally I order this type of food once in a while when I don't want to cook or am busy. But the price was beyond that threshold. I went there only when special friends visited me in town and took them there. And not many people went there. The reviews everywhere (Yelp, etc) were awesome. But people didn't go there. Partly because of prices, but partly because of the location. Why did they pick that location? Because there's a big company in the neighborhood. Surely there are plenty of well paid people there who would come for lunch? Yes there are and no they won't. Over the years living there I know this plaza well. It's a graveyard for restaurants - most of them likely relying on employees of that company eating there. All these guys had to do was spend time in the restaurants in that plaza prior to signing the lease to get an idea. "Ah, but they don't go to those restaurants because their food is crap!" Yes, the food is crap. No, that's not the reason. And then there's the food. Great food they made. But they weren't making a profit. So did they revise their menu to focus on items that would give good margins? No. They raised the prices. Fewer people came. They raised the prices again. Even fewer people came. This spiraled out of control. Within a year they had shut down. One of the co-owners told me there wasn't a month where they made a profit. I asked "Did you talk to any restaurant owners for their advice prior to opening?" Nope. If the food is great, people will come. These guys work (or worked) pretty good jobs prior to opening the business - sometimes in senior management roles. Is that how decisions were made at their companies?