Because they start it as a passion only to realise that its a costly venture with a lots of competition.
Embarrassed-Let-3924 on
Everyone thinks they’re the exception to the rule.
Additional-Sock8980 on
Low ish barrier to entry, passion and because it’s something they can see and touch. Most restaurants are run by foodie people or chefs, the successful ones that survive are run by business women/men and they hire great chefs.
Starting a fintech is much harder by contrast.
Infamous_Apricot_830 on
How would you know either you in 90% of 10% if you don’t commit to it?
I mean there’s no secret recipe to success, it’s mostly trial and luck.
ajps72 on
All business fail eventually, we are just stubborn.
TyFi10 on
90% failure isn’t even astronomically terrible. It’s not good either. But starting a new app or service business can also have terrible odds.
Personally I find the thing that increases odds of failure is overhead at the beginning. The more overhead you add the more risk you take on.
I started my companies as “too small to fail”, because I kept overhead so low that failure wasn’t really possible.
bytx on
You should take that statistic with a giant grain of salt. 90% of overall restaurants fail, the number is much lower for people that really know what they are doing.
AdvancedSandwiches on
“It’s asking people what they want to eat off a list and then giving it to them. How hard could it possibly be?”
Even knowing for sure that it’s harder than I think, my brain wants to tell me it’s super easy, and you can figure it out on the fly.
Restaurants are a cognitohazard.
kinkade on
Another slightly less common but still viable approach is for people to set up a restaurant as a way to offset a business that generates high profits or large increases in equity but has very poor cash flow. A restaurant can potentially provide a steady stream of income to balance out the fluctuations in cash flow from the other business.
Sweaty-Ad-7822 on
If we take away the passion, sometimes People overestimate their idea, underestimate the grind, and believe they’ll be in the 10%.
But sometimes, they actually are.
Ognisera on
Is there any exception? For example. people invest on stocks, crypto, etc, +95% of those people will lose money and panic sell during a bear market or during a deep correction. I don’t think it’s much different in most businesses…most businesses won’t be successful, restaurants are not an exception, is there any business where most people are actually successful and everybody who tries succeed?
blueBaggins1 on
Because 10% if the time they do not fail
AraBazaar786 on
I guess they still fail to research and keep the longest possible menus! And location they choose add to the additional pain.
cryptopo on
Vast majority of bands, relationships, and startups fail too. But they don’t all fail, and they can be a lot of fun while they last.
Pretend-Tale-6514 on
Parce qu’ils ont 10% de chance de réussir.
Et si en plus ils sont persuadés de faire partie des 10%, alors ils se lancent
infamous_merkin on
For the same reason we keep hitting on women/men who are better looking than we are and 90% of the time they will say no.
Because 10% of the time, they say yes.
Airplade on
For the same reason every NextDoor neighborhood has about 900 “professional” dog walkers.
Blind optimism. Thinking that they’re going to be a god in the industry.
TheButtDog on
If you zoom out far enough, 100% of them fail.
One can start a business and pocket a decent amount of money before shutting down
Impressive-Yam-6770 on
It doesn’t go past passion for these people once the boring stuff starts they stop 🤷
HarryBackster on
as someone who started a restaurant 4 years ago. i knew going in that i had a 50% chance of failing in the first 6 months. then a 50% chance of failing within 2 years. after two years hopefully you’ve gained enough regular customers to stay in business. If the owner gets lazy and starts to think they can afford to hire more people and the employees dont care cuz its just a job, quality goes down and regulars notice. or If the owner gets greedy, they start to pay themselves more, but dont plan on vital equipment needing maintenance over time. stuff like that can fail a business. people can make a bunch of money off restaurants and still let the business fail because they know how to start another one somewhere else.
DicksDraggon on
Because they ask their friends and family if their food is the best and their friends and family lie to them because they don’t want to hurt their feelings.
Everyone always wants to put some kind of fancy twist on things but if they would just make regular ol’ American food that is what works. We travel a lot and we notice that the places that try to put a twist on things usually close within a few years but let’s take this old run-down cafe in Stephenville, Texas that serves regular American food… it has been there since 1946 and still going strong. Or the cafe in Hazard, Kentucky that has been there about the same amount of time and serves regular food… still there. Same way with an old diner in Lincoln, Nebraska… still there. We went to one today that has been around 43 years and still packed.
People think they have to reinvent the wheel.
CherryRoutine9397 on
Because most people don’t think they’re starting a restaurant. They think they’re starting *their* restaurant.
They underestimate how brutal the margins, hours, staffing, rent, and consistency really are, and overestimate how much passion or a good concept will carry them. A lot of people also come from cooking backgrounds, not business ones, so they treat it like a craft instead of a numbers game.
There’s also survivorship bias. We all see the places that made it and assume skill or hard work was the difference, when luck, timing, location, and capital matter just as much. Everyone thinks they’ll be the exception.
And honestly, some people accept the risk because they’d rather try and fail than never try at all. It’s not always rational, but it’s very human.
effortissues on
That’s why you see so many franchises. They have an 80% success rate. I’d be terrified to open up an independent restaurant. One bad month and ya sunk. We saw it happen in real time during covid. Independent restaurants that were open for years had to shut the doors after a few bad months.
pingpong423 on
because they like their cooking
JustinMccloud on
Also a lot of people open a business like a coffee shop or restaurant because they want the feeling. Not because it makes good business sense
StandardIssueDonkey on
It’s love man. One of my friends started a restaurant about fifteen years ago, it’s still going. The margins are very thin though.
Another friend is a red seal chef (Canadian thing) at a restaurant and sets the menu, she loves it, but again, margins are razor thin. They do it because they love it.
If you don’t love the food and love the customers, don’t do it. The restaurant will be your life. Every owner I know in restaurants and bars is married to the business.
26 Comments
Because they start it as a passion only to realise that its a costly venture with a lots of competition.
Everyone thinks they’re the exception to the rule.
Low ish barrier to entry, passion and because it’s something they can see and touch. Most restaurants are run by foodie people or chefs, the successful ones that survive are run by business women/men and they hire great chefs.
Starting a fintech is much harder by contrast.
How would you know either you in 90% of 10% if you don’t commit to it?
I mean there’s no secret recipe to success, it’s mostly trial and luck.
All business fail eventually, we are just stubborn.
90% failure isn’t even astronomically terrible. It’s not good either. But starting a new app or service business can also have terrible odds.
Personally I find the thing that increases odds of failure is overhead at the beginning. The more overhead you add the more risk you take on.
I started my companies as “too small to fail”, because I kept overhead so low that failure wasn’t really possible.
You should take that statistic with a giant grain of salt. 90% of overall restaurants fail, the number is much lower for people that really know what they are doing.
“It’s asking people what they want to eat off a list and then giving it to them. How hard could it possibly be?”
Even knowing for sure that it’s harder than I think, my brain wants to tell me it’s super easy, and you can figure it out on the fly.
Restaurants are a cognitohazard.
Another slightly less common but still viable approach is for people to set up a restaurant as a way to offset a business that generates high profits or large increases in equity but has very poor cash flow. A restaurant can potentially provide a steady stream of income to balance out the fluctuations in cash flow from the other business.
If we take away the passion, sometimes People overestimate their idea, underestimate the grind, and believe they’ll be in the 10%.
But sometimes, they actually are.
Is there any exception? For example. people invest on stocks, crypto, etc, +95% of those people will lose money and panic sell during a bear market or during a deep correction. I don’t think it’s much different in most businesses…most businesses won’t be successful, restaurants are not an exception, is there any business where most people are actually successful and everybody who tries succeed?
Because 10% if the time they do not fail
I guess they still fail to research and keep the longest possible menus! And location they choose add to the additional pain.
Vast majority of bands, relationships, and startups fail too. But they don’t all fail, and they can be a lot of fun while they last.
Parce qu’ils ont 10% de chance de réussir.
Et si en plus ils sont persuadés de faire partie des 10%, alors ils se lancent
For the same reason we keep hitting on women/men who are better looking than we are and 90% of the time they will say no.
Because 10% of the time, they say yes.
For the same reason every NextDoor neighborhood has about 900 “professional” dog walkers.
Blind optimism. Thinking that they’re going to be a god in the industry.
If you zoom out far enough, 100% of them fail.
One can start a business and pocket a decent amount of money before shutting down
It doesn’t go past passion for these people once the boring stuff starts they stop 🤷
as someone who started a restaurant 4 years ago. i knew going in that i had a 50% chance of failing in the first 6 months. then a 50% chance of failing within 2 years. after two years hopefully you’ve gained enough regular customers to stay in business. If the owner gets lazy and starts to think they can afford to hire more people and the employees dont care cuz its just a job, quality goes down and regulars notice. or If the owner gets greedy, they start to pay themselves more, but dont plan on vital equipment needing maintenance over time. stuff like that can fail a business. people can make a bunch of money off restaurants and still let the business fail because they know how to start another one somewhere else.
Because they ask their friends and family if their food is the best and their friends and family lie to them because they don’t want to hurt their feelings.
Everyone always wants to put some kind of fancy twist on things but if they would just make regular ol’ American food that is what works. We travel a lot and we notice that the places that try to put a twist on things usually close within a few years but let’s take this old run-down cafe in Stephenville, Texas that serves regular American food… it has been there since 1946 and still going strong. Or the cafe in Hazard, Kentucky that has been there about the same amount of time and serves regular food… still there. Same way with an old diner in Lincoln, Nebraska… still there. We went to one today that has been around 43 years and still packed.
People think they have to reinvent the wheel.
Because most people don’t think they’re starting a restaurant. They think they’re starting *their* restaurant.
They underestimate how brutal the margins, hours, staffing, rent, and consistency really are, and overestimate how much passion or a good concept will carry them. A lot of people also come from cooking backgrounds, not business ones, so they treat it like a craft instead of a numbers game.
There’s also survivorship bias. We all see the places that made it and assume skill or hard work was the difference, when luck, timing, location, and capital matter just as much. Everyone thinks they’ll be the exception.
And honestly, some people accept the risk because they’d rather try and fail than never try at all. It’s not always rational, but it’s very human.
That’s why you see so many franchises. They have an 80% success rate. I’d be terrified to open up an independent restaurant. One bad month and ya sunk. We saw it happen in real time during covid. Independent restaurants that were open for years had to shut the doors after a few bad months.
because they like their cooking
Also a lot of people open a business like a coffee shop or restaurant because they want the feeling. Not because it makes good business sense
It’s love man. One of my friends started a restaurant about fifteen years ago, it’s still going. The margins are very thin though.
Another friend is a red seal chef (Canadian thing) at a restaurant and sets the menu, she loves it, but again, margins are razor thin. They do it because they love it.
If you don’t love the food and love the customers, don’t do it. The restaurant will be your life. Every owner I know in restaurants and bars is married to the business.