The Essential Money Lessons I Learned From My Restaurant Fail

Learn from this businesswoman's mistakes.

After just one year in business my new restaurant was voted favorite local dining spot in the town newspaper. Ten months later, I was selling the business due to overwhelming burnout. You can take classes, gain experience working with others, learn from mentors, and prepare marketing and business plans. However no amount of advice or training will ready you for the stress of entrepreneurship.

In the two years before I opened my restaurant, I learned many things, but nothing could have prepared me for the things I’d learn during the time I actually operated it.

Money: I Needed More of It

No matter how many times I entered numbers in my spreadsheets, I couldn’t always prepare for the amount of money going out and how fast it was spent. Nor did I anticipate how slow it would come in.

Equipment failures and power outages caused food spoilage. Kitchen accidents and server mishaps resulted in additional food loss. Unexpected repairs and supply needs, unplanned employee overtime and advertising “opportunities” too good to pass up strained the bank.

I prepared for slow growth but didn’t plan on having to close the business due to no power. Nor did I anticipate how slow business would be during town events or on Jewish holidays. These unexpected downtimes saw little money coming in, but rent and operating expenses didn’t stop going out.

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Staff: I Needed to Lead and Get Out of the Way

When it’s your baby, you often want employees to do it your way, but hiring, training, leading, managing and being responsible for paying employees is more than one person can handle.

I was naive. I wanted my employees to care as much as I did. I thought they could do what I could. Lots of frustration and tears passed before I eventually learned to better listen and observe, and understand my employees’ strengths. Finally, I learned to hire others to fill in the gaps and then get out of their way to let them do their jobs.

Customers: I Couldn’t Please Them All

My customers helped me build my business. They voted with not only their dollars but also the newspaper ballot and I listened. But, in my desire to please everyone, I sometimes got shortsighted. Just because one couple liked eggsalad sandwiches didn’t mean it should become an everyday item.

I learned to offer daily specials to rotate special customer requests without polluting the regular menu. This showed people I cared and kept them coming back, without overburdening the staff daily with a mile-long menu. But some requests — 10-cheese macaroni, for example — are not always practical.

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Pay: I Earned Every Penny but Couldn’t Take a Paycheck

Did I mention it’s hard work?

You’ll work hard (really hard) toward meeting all your business plan goals. It will take much more time than you think before you can legitimately draw a paycheck. Plan on everything taking twice as long and costing almost twice as much.

At some point, you may think you can afford to pay yourself, but as soon as you do, the air conditioning will go out and you’ll be facing an expensive repair bill. Wait until your business is continuously pulling in more than you’re paying out each month before you draw a paycheck.

Your personal finances will need to withstand no income for several months –possibly even a year or more.

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Life: It Went on Without Me

The first year of business we were open seven days a week, except major holidays, and I was there for every one of them. The second year, we closed to the public on Sundays but conducted private events. I was there for every one of those too.

I missed time with my children, husband and extended family. I kept fooling myself into thinking it would get better, but I failed to put up boundaries, let go, or schedule time for myself and loved ones. My need to succeed — or, rather, my need to not fail — was intense and I was stubborn.

Business Is Hard and Rewarding

The positive reviews, neighborhood awards and happy customers were thrilling. While it took a toll on my health and family, I’m grateful for the experience and lessons I learned.

To ensure your dream business doesn’t morph into a nightmare, learn from my mistakes. Prepare for the unexpected, think big, but work the small details, increase your budget, hire for your weaknesses, like your customers (but not too much), set personal boundaries and take time off. Your family and health will thank you.

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