San Francisco native Jason Yu spent $200,000 trying to open an ice cream shop, but the city's bureaucracy beat him

[Ryuthrowsstuff]

@PsiPhiGrrrl

Oh, but those created similar red tape and regulatory

Sure. But you might be able to practically pull one off for $200k. If you’re lucky enough to find a used truck for less than that.

Least ways it’s significantly cheaper and lower overhead to start than a stationary location.

Friend of mine built out a dumpling truck that never got off the ground.

Truck alone cost $250k to outfit, starting with a used panel van.

Overhead and regulations exist everywhere. But the costs to start something like this are also high.

$200k is not enough to start a business like this. You could be living in a libertarian waste land. $200k wouldn’t take you far.

[BakerB]

My estimates for opening a restaurant started at one million and went up from there. You can’t count on making a profit for years, so you need to add in a salary for yourself, so you don’t need a day job to keep the rent paid. Worked for one guy who owned a bakery-not a baker at all-he was a project manager who was often out of town. He put webcams all over the damn place so he could make sure his workers were working.

[Ryuthrowsstuff]

When this comes up, cause it comes up, I tell people that’s the minimum. And they’re better off going someplace much cheaper to do it.

Around here a million will get you open. But you’ll often need 2-3 to make it through the year.

We are both ridiculously expensive and rediculously seasonal.

It can be done cheaper, but most models that fit that are counter service and take out heavy. In less affluent areas. Delis and bagel shops can be built out fairly cheap, probably similar to ice cream.

My old boss took a run at a bagel shop a couple years back, it failed. He was out about $500k inside 9 months.

[pfranz]

I had wondered why successful food trucks switch to brick and mortar and usually ditch the food truck soon after. I assumed it was a lot more flexible and would supplement the brick and mortar and bring in revenue because of things like:

• for fancier food trucks people seem to accept higher costs than equivalent b&m
• limited menu (although few add ons and no alcohol)
• flexible hours. Changing and irregular hours are more accepted and you can close when you’re out of food.
• running out of menu items seems more accepted
• you can use a cheaper prep kitchen located elsewhere
• you’re not attached to a physical location

Of course there are downsides, too.

@Ryuthrowsstuff

Restaurants make money.

A friend who works in the industry responded with your point. It’s almost impossible to make money until you have multiple physical locations and can share resources between them.

[Bonivus_elderheart]

@Ryuthrowsstuff

“Do you have $20k a month for rent and a quarter million dollars for fridges?” Tends to bring people up short.

You forgot the backup power generation gear to keep all the meat from going bad when the utility decides to have an outage…

[Ryuthrowsstuff]

Generally what I see happening is people adding fixed locations (food trucks are brick and mortar, it’s not online retail) and additional trucks. You actually see a lot of traditional restaurants adding trucks and carts these days.

Thing is that’s logistically complicated for a lot of small businesses. So the trucks end up falling by the way side. Especially as many of these people got into that as a more affordable stepping stone to a full restaurant. Frequently you see them used to support catering operations (which is a great back stop).

That’s so popular that the place my sister booked her wedding will actually rent you a fake food truck to the tune of $900 bucks.

@pfranz

for fancier food trucks people seem to accept higher costs than equivalent b&m

No actually. Lower overhead tends to lead to higher margins. But outside of the fad a few years back or a specific following or trendy food item prices generally have to be lower than the identical dish would be at sit down equivalent.

Thing is a food truck heavily limits the kind of food you can serve. No one is paying $100 a head for a steak dinner at a food truck.

So the high end/cheffy food truck thing operates around doing higher end versions of simpler foods. You see an $8 hot dog vs a $2 hot dog. But the $8 version would still be $8 if it were served anywhere else. Since it is not literally the same hotdog, it cost more to make.

The big cap is food trucks can not serve alcohol. Alcohol is the single highest profit product in any restaurant, and adding a liquor license is the most important step in shifting a business into stable margins. Even if it’s just a couple of bottles of beer here and there it changes the numbers immensely.

Consequently bars are actually the most profitable business model in the restaurant business. Bars that are just bars. It’s hard to make a place that doesn’t serve food at all work these days, but if you can primarily sell alcohol you’re probably good.

@pfranz

Changing and irregular hours are more accepted and you can close when you’re out of food.

This is actually a massive issue. Because it makes revenue incredibly unstable.

If customers can not reliably follow you they can’t plan to patronize you, if you are not in a fixed location it is difficult to generate the sort of local following and regulars that keep you stable during slow times.

Volume becomes increasingly reliant on foot traffic in your current spot, weather and what have.

You may sell nothing, or everything you have. And it may depend on which side of the block you’re on.

@pfranz

running out of menu items seems more accepted

This a bit of a problem too. If a good one have.

Running out of stuff means you sold it all. But it also means potential lost sales, especially if you’re out of food entirely.

Since your prep and storage is elsewhere, and the capacity of the truck is pretty fixed. You have no way to take advantage of that additional demand.

Which is an especially big issue if you might not cover your operating costs the very next day. And there’s a bigger chance of that in a truck.

It’s more accepted at food trucks cause it happens so often.

@pfranz

you can use a cheaper prep kitchen located elsewhere

Have to. And it’s not always all that cheaper. You’re required to use a licensed prep kitchen for anything done outside the truck. And no truck or cart is large enough to prep or store everything inside. You also need some place to take deliveries of product.

Prep kitchens and storage yards are mercurial. It’s hard to find a long term spot. They’re often gonna be really distant from where you’re operating. Sometimes hours.

Part of the point in a store front spot. Own your own prep kitchen. If you’re gonna do that, might as well retail.

[FSogol]

goPuff is what will happen to the investment money.

[_osivot]

It’s cool. We already have Bi-Rite Creamery in that area, and yes, they have a tea infused flavor.

[allenk]

@_osivot

We already have Bi-Rite Creamery in that area

I was thinking of Humphry Slocombe. Bacon. Olive Oil. Peanut Butter Curry. Here’s Your Damn Strawberry.

[pbasch]

What about that friend who has opened several restaurants? Was that in LA? Look, I don’t know the people or the details, but while, yes, there is too much bureaucracy and layers of grift etc, it’s also possible to open businesses. That’s why these cities are full of… businesses. And restaurants and ice cream shops. And of course, people will sink money into businesses that don’t get off the ground for one reason or another, or do start and then fail. Or don’t fail but never work out quite.

My sister opened a restaurant in Newburgh NY, at the depth of the Great Recession. Made no money for a few years, which is apparently normal for restaurants. Now it’s doing OK through the pandemic. So… much… work. I wouldn’t do it, but my sister is energetic like that.

[Sludge]

This has happened to a number of businesses in Santa Monica.