Looking to start, own or run an eatery? Heed these warnings from a seasoned pro. Half of Americans have worked in a restaurant at some point, and a healthy portion dream of opening their own joints. (The number of eateries in the U.S. will soon top 1 million.) Dependable mortality rates are hard to find---a recent study found that 60% of new restaurants close within five years---but by all accounts, this is clearly one tough business. Tom Morales, established Nashville restaurateur and owner of Tomkats, a movie-set catering company, knows the tricks---and traps---of the trade. Morales has owned and operated three restaurants---The Loveless Café, Saffire Restaurant, and The Southern Steak & Oyster (opened last summer)--that today collectively generate about $25 million in annual revenue. “Everybody likes to cook,” says Morales, 58. “It’s a creative and emotional experience, but it doesn’t necessarily translate into business.” A warm and wisecracking ex-college-football jock with an easy smile, thick forearms and nine siblings, Morales got a taste for making food at a tender age. “I was cutting the grass at 6 and manning the grill by 8,” he recalls. Mom was no slouch in the kitchen, too: “I think she was the first one to cook a lentil in Nashville.” For those who don’t have 30 years of hard-won restaurant experience under their belts, here are seven mistakes Morales urges everyone to avoid, in his own words: #1. Don’t fall victim to the romance. The food-service business is like writing a novel: Everybody wants to do it but not everybody is made out for it. I sold building supplies and saved enough money to start a takeout barbecue business in South Carolina, next to a state park. If the wind was blowing right and I poured garlic over the fire, it would blow that sweet-smelling smoke right over the campground, and people would come out of the woods. You can’t count your hours. I worked 18 to 20 hours a day and wasn’t making any money. I realized that putting a pig on smoker is not as romantic as it seemed. You take something that shrinks a third when you cook it; then you pick the bones out and it loses another third of its weight; and then you have a third of what you started with and everybody expects it to be cheap. You put a couple extra napkins and a toothpick in there and you might not make any money. I was open three years and never really made much. #2. Don’t go big off the bat. Opening my own joint showed me everything I didn’t know. At least I didn’t have a lot of money in it---about $15,000, plus another $6,000 for a chimney pit, a little cabin and two To-Go windows. I can’t tell you how many country music stars or famous people pour millions of dollars into a restaurant and lose their butts. #3. Don’t lean on your suppliers. [After I left the barbecue business], I went to work for a friend in Destin, Fla. The first day he had me clean 1,500 lbs of amberjack. I made $300 a week cleaning fish. By the time I left that position, I was buying boatloads of fish. I could look at a fish’s eye and know how long it had been out of the water. During the summer, when fish were everywhere, restaurants might pay $2 a pound. But if you bargained too hard in the summer, your suppliers might not sell to you in the winter when the fish weren’t around. We might pay $4 a pound in the summer to build loyalty so that we knew we could get fresh fish in the winter. #4. Don’t assume a good concept guarantees success. There weren’t any fresh-seafood houses in Nashville in the ‘80s. I wanted to start something called Second Avenue Seafood. I made a bunch of plans and spent a lot of money, and then I realized I wasn’t going to get a bank loan. And investors didn’t want to give me money because I didn’t have an independent track record. I assumed you just drew up a business plan, got an artist to do some renderings, and got into the business. I was naïve in thinking a good idea would get you there---but it won’t. #5. Don’t open before you’re ready. I made this mistake every time I’ve opened a restaurant. You’re better off swallowing the money and not listening to outside pressures. With The Loveless Café [now a tourist mecca in Nashville], we had no idea what we were getting into. It was a pretty simple menu but we didn’t think the volume of business would be that great, and we didn’t train the staff as well as we should have. The Southern Steak & Oyster was four months behind on construction, but we were paying $40,000 a month for a full management staff. [Typically, you hire a GM and Head Chef six months before you plan to open.] If we had waited until we were really ready to open, we would have gone bankrupt. So we sped up the training process---from four weeks to four days. We were comping a lot of food because we didn’t meet customers’ expectations. We practiced on real customers when we should have practiced on invited guests. That was a mistake. #6. Don’t let the honeymoon period fool you. People tend to fall in love during the honeymoon period. When you open and you’re packed, people mistake that for success. But customers are really just checking you out. After six months, if your sales spike up, you’ve got a home run; if they level off or turn down, it’s almost impossible to recover. #7. Don’t lose your cool. The whole creative process is where I get the most enjoyment, but the public retail side can be discouraging. Some people bring negative energy into the room. I come in there some nights and I just do not have [the patience], and the only way I can get it is to have some rum. Have instructive or inspiring tales from the food-service world? Please comment on this post.
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