Ask most people that question, and you'll hear a lot of talk about risk-taking and passion and independence. But here's the real answer: They all want to open a restaurant. I can never understand it. I myself have owned three. And I'm thinking of starting a fourth. God only knows why! It's certainly not for the profits. Is it the glamour? Sitting behind the bar when your friends come in? I really don't know. But the allure is always there, and as you can tell from this question, I'm not the only one who feels that way:
"Hello, Norm. I am currently working a new business plan for a restaurant I am trying to start up. I am so lost when it comes to the funding section. I have no start up money, so it will all have to be funded by others. What percentage of the company are they entitled to? I am not even sure how much money I need. I know this is very vague, but do you have any suggestions?"
If you really want to endeavor on this foolish folly -- just kidding! --here's my main piece of advice: Whatever anyone tells you you need in startup capital, double it.
I can't be too specific without more facts, but if this is your first experience, understand that careers are built by taking a long-range view. If you want to open a place like Le Cirque and spend millions of dollars, well, you're not going to get that done. Start with something small that you have a chance of raising capital for. And you're going to have to start with Rolodex financing — or maybe it's Outlook financing now: friends, relatives, associates.
How much of the company do you give away? As much as you have to in order to get the thing off the ground. You don't necessarily have to maintain ownership control as long as you have voting control. So, for example, you can give away 80 percent of the stock and profits as long as you have 51 percent of the voting control. But the main thing is, get the restaurant up and running.
NORM BRODSKY | Columnist
Street Smarts columnist and senior contributing editor Norm Brodsky is a veteran entrepreneur who has founded and expanded six businesses.