It seems like there's a new restaurant opening in the Triad every week, but there are also a lot of closings. When the Triad Business Journals' Kristin Zachary asked restaurant owners what it takes to build a successful business, they say the numer one reason they fail is that the venture is under-capitalized.
For this week's Business report, she talks with WFDD's Emily McCord about the challenges facing these entrepreneurs and the potential success.
Zachary reports that one of the reasons the Triad is home to many restaurants is that there's a low barrier to entry and that owners say there's a strong and supportive communuty. But she says that can be a double-edged sword.
"It's relatively easy to open up a restaurant in the Triad if you have that financial backing, but what's more difficult is keeping a successful restaurant going," says Zachary.
In this week's cover story, she gives a hypothetical look as to what it would cost to open up a 4,000 square-foot restaurant in the Triad:
- Rent:
$56,000 per year based on $14/square foot
- Construction and Design:
$300,000 based on a $50/square foot
- Equipment:
$150,000 based on conservative estimate for a kitchen of about 1,000 square feet
- Labor and Training:
$30,000 to hire a general manager and kitchen manager and train staff (prior to opening)
Zachary says that there can always be other unexpected costs that can impact a new business.
"If you're lucky, then you'll have customers standing in line out the door. But not evey restaurant is going to experience that," says Zachary. "So, you're really going to have to work people in the door, whether that be looking at marketing or advertising, or some other expense that will really drum up business for that location."
The Business Report on 88.5 WFDD is a partnership with the Triad Business Journal.