My son is a senior in high school and is trying to decide what to major in. He has chosen Business, but he wants to narrow it down a little further to make sure the school he chooses offers his concentration. Entrepreneurship is a major that pops up at a number of the schools he is applying to.
Entrepreneurship… isn’t that what you become when you major in business and go out on your own? How do you major in something that is a byproduct of doing something else? It’s like majoring in getting rich before majoring in something that makes you rich, isn’t it?
Maybe not. Being an entrepreneur seems to be a state of mind – a bit of genetic wiring that makes one act on their creative instincts versus suppressing them in favor of “learning the ropes” through working for others. Working for others and doing a great job will methodically and incrementally improve the employee’s proficiency at a task or series of tasks. Studying accounting will teach one the mechanics of proper accounting methodology but will it help them start their own accounting firm? Studying engineering or information systems will develop skills that will eventually allow students to build skyscrapers or program robots, but will those skills teach them how to start their own engineering or software development firms?
If we agree the answer is “no” then the next question worth asking is: does one need to be an accountant, an engineer or a software developer to launch one of those businesses? A true entrepreneur will fearlessly build businesses in promising markets by carefully outsourcing the right experts to deliver the end product, often knowing very little about the business they are launching.
Restaurants, despite being renowned for high failure rates and long hours, can be great additions to an entrepreneur’s portfolio. As restaurant consultants, we often troubleshoot restaurants in distress. We find those that are owned by former restaurant employees are also more prone to having operational problems – the very problems they are hired to hold in check when working for someone else. We get into the restaurant and quickly find that those owners are doing far too many tasks themselves versus delegating those tasks to their staffs and holding them accountable for execution. Why? Because employees-turned-owners do what they know how to do…they work in the business. Entrepreneurs who struggle suffer a different illness – they are often over confident in their ability to “figure it out” so they not only don’t know how to build a successful concept, but they undervalue the need to find people who do. Actually, most frequently, they mis-identify low level or inexpensive surrogates and expect them to have the skill set to create systems and bring their business to market.
Truly restaurants are fun and can be relatively easy to operate provided the right systems and philosophies are in place. They are usually creative endeavors, allowing the owner to create and launch something that makes people happy – whether through food, drink or entertainment. Restaurants are theater… they are parties… a little bit of Hollywood… something to call “my place” – whether by the owner or by patrons. They are popularity contests, sometimes trend setting, sometimes newsworthy, always the talk of the town. Ask yourself why Yelp and Trip Advisor rate and review restaurants but they not accounting or software development firms.
Indeed restaurants can be difficult because of several factors. To name a few:
- the work force is shrinking, and staffing is always a challenge
- restaurants usually produce food and retail food in the same building
- employees feel entitled to the inventory
- inventory has a shelf life
- production methods require skill and discipline to follow recipes (easy to burn a pot of soup or add too much salt)
- trends change
- competition can be fierce
- a restaurants reputation is tied closely to social media reviews
However, a restaurant is also a great addition to a portfolio because they are easy to run from arm’s length with the right systems and training. They round out an entrepreneur’s collection of businesses with something that is fun and social. The business owner that also owns a successful restaurant has achieved something great in the eyes of their peers. They are Renaissance women and men… well rounded. They have social clout and community relevance. They are the hosts of the party and the purveyors of a good time. Most importantly, a well-run restaurant can throw off cash…lots of it. 15% to 20% net income once the concept-development debt has been paid.
Successful entrepreneurs in other businesses should consider opening their own restaurant. The key is to invest in the things that will set it up to run without tying the owner to daily operations: concept development, hiring, training, and, most important, systems. With that in mind, maybe a BBA in Entrepreneurship isn’t weird.
Do you need assistance with advice on entering the restaurant business and starting up your restaurant? We’re here to help! Contact us today, and let’s chat.
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