This is Lynn’s Paradise Cafe in Louisville, KY; a true innovator in food and experience.
I was fortunate. I grew up the son of two generations of entrepreneurs and because of that I learned a lot about what it took to make a business successful, long before I was legally able to hold a job. That said I took away a few particular learning’s from my parents restaurant that I have not forgotten.
- Many restaurants fail because the lack startup capital and must rely on debt
- The ones that survive the debt are usually killed by their burn rate
- Owners think they need to completely remodel before opening
- Owners think they need brand new equipment
- Owners think think they need new (insert item here)
- Before they ever deal with managing food stocks and payroll, they spend the safety net on atmosphere
- They don’t attract the right crowd, because…
- The place isn’t unique
- The service isn’t special, memorable, innovative in any way
- They moved into the neighborhood where all the old favorites are
- They don’t understand seasonality
- They couldn’t manage their own finances, but expect to manage P&L
- They only take advice from people who encourage them without sharing the harsher realities.
I was thinking about these things today, because I have been reading about a few failed startups and for a couple I am familiar with I would share these words I learned from to failed starts:
- You should have built smaller
- You should have spent slower
- You should have had an emergency fund
- Just because you have an idea doesn’t mean it is sound as a business
- Even if you had done everything else you probably still would have failed
- If what you built doesn’t serve a unique enough need…
- If what you built isn’t sufficiently different from the crowd…
Look, I believe in taking projects and rolling with them. Take a risk! Run your startup! Still, odds are you will fail. We all do. The best entrepreneurs, no matter how you define them, learn to fail faster and do it with humility and grace.
Business is business, doesn’t matter if it is food or tech. It comes down to how much money you bring in versus how much you spend. Best of luck in the future guys.
Jeremiah
{ 5 comments… read them below or add one }
Mmm french toast…
Besides startups, this post would be beneficial for young people starting out in life. In fact, I’d recommend your blog to my 14yo son. Thanks for sharing your thoughts!
Great post Jeremiah! I think too often people jump headfirst into a business or project without figuring out first if there's a "there" there
My mom runs a restaurant in rural northern california. I just returned from five days there and saw the ups and downs first hand. Find the problem you solve and solve it well. I think that "feature creep is also something new companies need to be aware of.
"fail faster, succeed sooner" is good advice.
I'm always confused when a new restaurant opens up in the same space one previously failed, and serve the same type of food. That business failed for a reason; how is the new business going to be successful in the same space without having a point of difference?
I think this is why some of the best web apps out there come from someone's own needs. They couldn't find what they wanted in the space, so they made it themselves. Obviously, this doesn't guarantee success, but chances are they are different enough from the competition that they'll attract others with similar needs.
Also, why is Lynn's Paradise Cafe so special?? You didn't tell us!