Friday, November 7, 2008

News of the Weird?

File this under "Whacky Headline Sequences".

Check it out...

Headline 1:
BREAKING NEWS: General Motors reports $2.5 billion Q3 loss, burns $6.9 billion in cash

Headline 2:
Ford plans more cuts after loss Firm burns up $7.7 billion.

Headline 3:
Obama seeks advice from top execs

I hope he's being very selective.

Saturday, November 1, 2008

$100 Million Before Break Even? That's a Lot of Pizzas!

I'm REALLY glad I'm in the online information publishing business. You know, where you can start a web-based business for a few hundred bucks - and where the sky is the limit.

Imagine, instead, being in the restaurant business. Good grief! No thank you. Here's one example why not…

A new place just opened here in downtown Delray Beach. Vic & Angelo's. It's gorgeous and the food is good - I checked it out just after opening night.

I'd been watching them renovate the building for about 18 months. And I knew they had to be spending a TON of money. But I almost fell over when I read the final figure.

$3 million on renovations and another $1 mil on additional start up expenses. Holy cow - $4 million bucks to open an Italian restaurant in Delray Beach!

Restaurants keep only 4 cents of every dollar spent by a customer, according to Hudson Riehle, VP of research and information services at the National Restaurant Association. The rest of the money, he says, is split amongst food and beverage purchases, payroll, occupancy and other overhead.

Now I'm no accountant…

But that sounds to me like they'll have to make $100 million in sales before they even break even. $100 million bucks - that's a lot of pizzas! About 5 million in fact!

OK, OK – so they sell all kinds of nice meals. That’s still a million covers (dinners) at (say) $100 each. Yikes.

My initial impression was that the person who did this had to be nuts.

But that was before I found out the owner, David Manero, is an experienced restaurateur. And this is actually Vic & Angelo's second location. They have another one up in Palm Beach Gardens.
So he must, you would think, be well aware of all the margins, risks and rewards.

If this second store is a success, well, I'll say more power to him.

But meanwhile… remind me to never start a business where I have to sell $100 million before I can break even!