Question

I don't know if this topic belongs here or what.
But, I'm planning to make a business in cooking. It would be an Irish Fast-Food; but there are a lot of pros and cons to it. I don't see a lot of people doing that sort of thing, but I just want to know if it's worth it. :/
-I fan the best answer-

Answer 1

This is in the right spot since it deals with business.


Pros:



* It's unique and different (depends on the market)


* If you are a good cook, or know someone who is, then you can make really good food.


* Making good food at decent prices brings in a lot of customers who spend money. They then tell their friends which helps grow the business and the brand.


* If you invest properly (time and money), then you can really make this business grow to someday be comparable to McDonalds or Burger King. Of course this won't happen overnight and will take a lot of work.


* If the above two things happen, then you can make a ton of money.


* Making money is great, but ideally you'll love the job. This passion should be fed into the company to help it grow.



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Cons:


* There may not be demand for Irish fast food. You'll have to do market research to see if people will buy it. There has to be a demand for not only Irish food, but fast food combined into the mix as well. You may just want to serve Irish food. This is very important. If there is demand, then you have a business. Otherwise, you just have a business that isn't able to sell. If you can't sell, then you will go out of business. You'll need to do market research to figure out if there is demand. This may cost money if you hire someone to do it for you, but you could save money by randomly surveying people yourself. This is at the top of the list because this is the first thing you need to address.


* Startup cost is high. Rent, utilities, buying food and equipment, paying workers, etc all add to very large expenses. I'm sure there are other expenses that I'm not thinking about.


* Because of those large expenses, you'll most likely have to borrow a lot of money.


* A risky startup will have to pay that borrowed money back at high interest rates (higher risk ---> higher interest). This money you pay back (on a monthly basis) is another expense. This is IF the startup company can borrow from the bank. Often, banks will turn new companies down because they don't have any cashflow that the bank seeks. It's ironic but you need money to borrow money. If you can't squeeze any money from the bank, hopefully friends or family will chip in. Of course, they'll most likely want to be paid back somehow. You can pay them in the form of company stock, which has the potential of cashing out big money down the road. They may also want to be partners in this business. If you go the stock or partners route, you'll have to give up control in some way.


* You'll need insurance. Things like property insurance, insurance for your employees, and insurance for anything that may happen to your customers. This sounds unfair, but it's true: anything bad that happens on your property is ultimately your fault in some way. You could probably get away with having no insurance on some items, but other forms of insurance are essential and it would be illegal to not have those forms of insurance. Some would argue that if a person hurts themself on purpose, then it's not the business owner's fault. I agree, but the law may not. So it's always good to have this base covered.


* Many businesses fail in their first few years. A lot of people blame the lack of money to keep it going. They may say to themselves: "If I only had the money, then it wouldn't have failed". This is true to a point. However, there are many other factors that kill a business. For instance, competition could kill your business because if someone like McDonalds can make cheaper food, then people may go there instead of to your business. If you have stiff competition that has a much lower price, then you can pump all the money in the world in your business and people wouldn't come to it. If you can somehow justify the higher price, say with better food or service that makes the higher price worth it, then you can probably survive. The fact your business may fail is one risk you should always keep in mind. Moreover, you should have multiple plans to keep the business from failing. You should NOT come up with a plan once things look bad. You should have a plan before you dive into starting up the business.


* If your business fails, then you'll be stuck with a ton of debt (assuming you were able to borrow money). In addition, your revenue stream that was your business has dried up. So that means you have to find some quick way to make money to pay off the debt. Most often this doesn't happen which leads to bankruptcy. So your assets would be sold off to try to pay off the debt. Having bankruptcy over your head means it is much harder or impossible to get credit in the future. I'm not sure how long this stays on your record, but I think it's like 7 to 10 years. The moral of the story is to pay off all of your debts. That means you need to have enough cash coming in.


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Notice how I wrote more for the cons as compared to the pros. It is important to know all of the risks before jumping into something big like starting a business. I'm sure there are other risks that I haven't mentioned as well, but I can't think of anything else (that doesn't mean there aren't any other cons).


Once you a) realize the risks, b) accept them as reality, and most importantly c) find a way to prepare and address them, then you are well on your way to starting this business the right way. You should always have a plan that has multiple branches just in case something goes wrong. Be honest and realistic with yourself: something is bound to go wrong. Once you address all of these possibilities, you are in better shape to help the company survive pretty much anything.


Also, when it comes to others investing with you or lending you money, they will want to see this plan. If you don't have one, then it sends up red flags that make smart investors run for the hills. Having a plan shows that you're being smart to cover all your bases and it shows them that you will pay back their money somehow. So this plan should be very detailed and have backups. This plan should be complex to address reality, but also simple enough so you can communicate it to anyone of any background.


The basics of your plan boil down to these two questions: how do I make money? how do I address all of the things that want to suck all of my money away?


Those two questions are definitely oversimplified, but they effectively capture all of what I've posted and more.



Last but not least, you need to always keep this in mind: no one knows everything. That's true for me, you, or anyone. That means that I could have missed a few things or I could be wrong about a few things. So that is why you should seek others to give their input as well. The more the merrier. Be critical of everything you hear or read, but also keep an open mind.

In terms of you and your new potential business, you should seek help and advice at any and every step of the way. You don't always have to take it. That's the beauty of owning, controlling and running your own business. It's your decision. Despite that, you should have trusted advisors who know what they are doing. Having a team of people who specialize in what they do and know best will help you go very far.


If you do decide to start and run this business, good luck with everything.