Some comments after reading other responses.
“The ONLY way I would consider a 2nd location is to have an operating partner (less than 50% owner) who has invested a significant portion of the upfront costs. (This can be accomplished without franchising, but will require a lawyer’s help.)”
It is estimated that 85% of all partnerships in this county fail. this doesn’t mean that a partnership can’t work but it certainly means the odds are definitely not in your favor.
Code:
(Quote)"Just really think hard what it is you want to do all this for. Truly what is important to you and your family.
We wanted to do all this for a good retirement, a better life. And if we keep going yes we will have a great retirement. But it dawned on me one day that my whole life is passing by. My daughter is growing faster than I can believe. My husband and I are graying faster than we can color. And dog gone it I had a good life and I still do but I want to live and be a part of that life. I want to socialize with the friends we haven’t seen in 2 years. I want to play one more game of softball before my knees are shot. I want to know for sure when my daughter graduates I will be able to go without some big incident happening."(Quote)
It has been often said that to be in the restaurant business you have to have a little touch of insanity (if not a lot). For many years I have been in this business with many different types of restaurants and even in different states at the same time. Very difficult to do this and maintain a normal family life. In my case I have five children (all adults now) and my wife, more than anything, kept this family together. And she did not have a job or was involved in the restaurants. Friends, acquaintances and people I don’t know occasionally will ask me how they can get in the business (because they have a recipe or something) and what would my advice would be. I think it is very important to love what you do; to wake up on Monday morning and feel good about going to work. I tell those who inquire that they should try very hard to fall in love with anything but the restaurant business.
(quote)It can be done. It can be very profitable. Success depends on systems, consistancy and planning. The process does NOT involve doing more work, it IS all about working smarter.(quote)
Bodegahwy just nails it with his statement above. But again, going from one store to multiple stores is the great separator in the restaurant business. It tests us in so many ways that are not tested with just one location. Some of us are not built to do it for any number of reasons and as Dirty Harry said, “A man has to know his limitations”.
Good managers are hard to find but that is a constant factor in this business. Good partners are even harder to find and if you make a mistake in your choice then it is often even harder to correct the mistake. You can terminate a manager and feel angst for a day or two but resolving a partner choice mistake can keep you tied up for many months and even destroy your business before its finished. You know how they say you never know your spouse, really, until you have been married for a time? Double or triple that with a partner in business.
We are in a business that is labor intensive at the wrong end of the age scale (kids). There are a lot of good kids out there but it takes work to find them. When I first started in this business it used to frustrate me to no end because it was so difficult to find the good ones. Then I realized one day that I thought we had an excellent business with an excellent product and that the operating standards were very high. If, for instance, I thought that our operation was in the top 10% in the area then it stood to reason that that we would be looking to hire only the top 10% of the available work force. For a time we actually tracked the number of applications we received and the number of applicants we actually hired. The numbers came pretty close to that 10%. We thought, well, if we were willing to increase the pool to 50% of the applicants then we would have all the employees we need but of course we were not willing to do that because we knew it would hurt our operation. So our frustration was self imposed but we realized it was necessary if we wished to continue running a good operation.
Another final thought about all of this. In our experience we overwhelmingly prefer to bring people up through our own organization (as small or as large as it may be). This goes back to the culture thing. We have a way of conducting our business that has been developed over many years (no matter what restaurants we owned). It concerns, among other things, the nature of integrity, work ethic, how people should be treated and respected and the many usual ingredients of the various work processes. These types of things cannot be given in the form of a manual with the expectation that the culture of the business will be automatically transferred to the employee. It takes this manual, then the constant verbal reinforcement, the exposure to other employees who are already embedded with the culture and TIME. For some new people the “culture” rejects them or they themselves reject it. Even the very youngest, when exposed to the culture of your business, begin to get a feeling that this is for them, or not. This does not happen every time but enough to be a very beneficial factor in the retention or rejection of employees for your business.
We think that this “culture thing” is critically important when we need another management person. If we have a candidate who has been immersed in our culture for some time then we have eliminated many of the issues that would have to be resolved with someone brought in from outside the company. What remains is for ownership to decide whether the applicant has specific management skills and the temperament to make the move. We can often take a very good employee and ruin them by trying to make them part of management as we then we lose a management candidate and most likely a good employee because it is difficult to go back.
When we hire a management candidate from the outside we increase the variables that must be evaluated significantly. It can be, and is done, all the time; it just increases the downside risk and it requires a higher level of ownership skills in terms of evaluating candidates. Some of us can smell a phony many times and it stops there. Some of us cannot smell a phony and we have to waste time, energy and often money beyond wages to make the discovery.
More than anything I would re-read Bodegahwy’s quote above again and again. Systems, consistency and planning. To ignore these is to increase your downside risk big time. We cannot avoid risk if we wish to progress but we can work to take calculated and educated risk to reduce our downside.