Two weeks ago, Dallas Innovates, an online source for what’s new and next in the North Texas innovation ecosystem, hosted Dallas Startup Week. The five-days of free events took place in different locations downtown. The goal was to inspire entrepreneurs through a series of panel discussions, talks, and seminars. Thousands of smart and creative people from different industries showed up. I picked up on one discussion about restaurants titled “No Restaurant Experience? That Didn’t Stop These Dallas Eatery Founders.” Oh, but it has certainly ruined the lives of many who tried and failed. Here’s a brief synopsis of the panel. I added a few thoughts of my own.
The panel of Nick Backlund, Javier Heredia, and Joe Groves was moderated by Joe VanOflen. Although their names are less familiar, their stories mirror many restaurant operators who opened restaurants without any experience. Backlund was a Minor League Baseball player with a dream to open a bar. He now operates Hide in Deep Ellum. Heredia was a commercial pilot who wanted to open a socially conscious restaurant. His Social Pie is open on Maple Avenue. Groves, a Dallas businessman, decided to fill the niche of indigenous food in the West End. He opened Ellen’s Southern Kitchen in 2012.
The full report of their session is here. Here are some of the points you need to consider if the insane desire to open a restaurant without experience ever crosses you mind.
“Opening a bar in Deep Ellum is a challenge.” To that I add, opening a bar anywhere except your living room is a challenge. A huge, 24-7-7-to-infinity challenge. If you are over 40, pass go, collect $2,000, and become a newspaper writer. You will have a better chance of succeeding.
“Finding good employees is also a challenge.” I will be blunt. Finding any employees is almost impossible these days. Finding good employees will cost you at least twice as much. And you’ll be lucky if they stay with you for six months. You’re even luckier if they don’t take your secrets to their next boss.
To Tip or Not to Tip?
I was not at this seminar so I can’t tell you how they jumped from workforce to tipping, but it’s timely discussion. Many restaurants are suggesting 20% tips to consumers. Others are contemplating the “no tip” policy. Chef-owner Mansour Gorj of Canary by Gorji is the first one to try it in Dallas. The panel didn’t come to a clear decision. Blackland tossed out the incentive argument noting the tipping system “works fine the way it is.” Groves agrees and said, “I look at waiters as sales people. Their tips are commission in a way, the more they ring up, the more they make.” I’ll agree with them. I think service would go down—if it can get any lower—without cold hard cash on the table.
The Issue of Health Insurance
This is a hot topic and one you’d better pay attention to if you are sitting in front of a closed Whataburger and thinking about pulling out grandma’s recipes and opening a diner. The panelists touched lightly on the issues. They sighted a closure in Fort Worth that the owner blamed on insurance premiums. Honestly, I’m not sure if many restaurateurs have a firm grip on the health insurance issue because nobody in the country has the problem in focus. That said, don’t open a restaurant if you can’t afford worst-case-scenario premiums.
I hope this little recap has brought you to your senses. Yes, I am a bit of a Debbie Downer on this subject. I’ve seen too many people lose everything they owned to get into the restaurant business. It’s sad to see them concentrate more on the restaurant than the business.