My Dad's Failing Restaurant & Contemplating Bankruptcy

I apologize if I'm posting in the wrong area or if I shouldn't be posting this at all. I try to contribute ideas when I can and don't want to be one of those people that only take and don't give but I figured where else better to ask for advise then in this Awesome forum filled with Intelligent people. So here goes...

My father is 57 years old and has been a Chef his whole life, he opened a few restaurants in the Mid-West and they failed b/c he specializes in Italian and they just weren't into that out there. So last April of 2008, he opened a small eatery in Huntington Station, NY (Long Island). It's not his style at all but it was all he could afford. This place is more of a take out place and was a BBQ joint before, he made it into a fancy little italian/american/seafod/continental eatery, I mean the menu is huge. You can see for yourself at myspace*com/jerichogrill. So I know that it takes more than a year to have a steady customer base but we just don't have that kind of time. This place is right on a busy road but pushed back to where it's barely seen. But be that as it may, the rest of the stores in the shopping center do pretty well and he put banners and signs on the sidewalk so people know that it exists. He has tried all kinds of advertising and marketing, my brothers and I even handed out flyers, coupons and free food. My father is a GREAT cook and everyone loves his food, he does have repeat customers but just not enough.

Anyway, he is now about $150,000 in debt and it's only getting worse. He is talking to a bankruptcy lawyer tomorrow and we have an appointment with our local SCORE next week to discuss all options. My question is should my dad put the house in my name before claiming bankruptcy or is he safe because he has a corporation? And should he even contemplate bankruptcy? He's been trying to sell the business, we are now selling it for $35,000 and the rent is like $2,000/mo and the lease if for like 5 years with option to extend. The bills aren't bad but we have to keep up the house too, that's what makes it difficult. My mom & I are working and doing what we can, my 1 brother is on unemployment which is a joke and my other brother is a full time student so it's getting pretty bad.

Sorry for rambling but I just wanted to get some advice and/or suggestions from you black hatters as I think you guys are some of the smartest and most clever bunch of people I've ever talked too. Some of the things I read in this forum just blow my mind. I'm not looking for handouts or sympathy, I work full time and as I stated in my recent post, I am constantly utilizing black hat to make more money... I am just looking for input.

So thank you for your time and I appreciate any feedback. As always, BlackHatWorld friggggggggin Rulezzzzzzzz!!

 

Huge menus are not the way to go, he should shorten his menu it cuts costs. He should have a lunch menu and forget the banners have humans go out interact with potential customers. Will take a look at the myspace page.....

 

Yes, bankruptcy is not fun, but these are defnitely questions for a lawyer.

I wish I had some advice for you, but I really don't, but I wish your family the best...very sorry for what you're going through.

 

Hello,
I live on Long Island and will go to your dads place to eat this week.
One way to get some extra biz is the tell a friend method with the customers that you have.
Give some coupons to customers to give to thier friends,give some free deserts out if they tell a friend.
Good luck

 

If your Dad's business carries on in the forceable future you MUST use email marketing. Always make sure that you get the email address of diners, and then when bookings are slow you can send out special offers, 2 for 1 deals, free desserts etc. There are multiple ways of getting diners email addresses from questionaires to straightforward asking.

As far as getting quick business you need to try and find who is dealing with your potential customers right now, and "piggy back" their marketing. For example, go to a local health club/gym and give them the offer that anyone who renews their membership gets 25% off a meal at your place. The gym will promote to their base for free and you will get new diners to hopefully get onto your repeat email list.

 

DISCLAIMER: I'm going based off what I think I know, so feel free to ignore anything I say.

My father is in a similar situation. He runs a retail store in NH and it isn't doing so hot right now. He's consulted with a couple of different lawyers etc and this is what he's told me. Your family home will be safe in a bankruptcy, your business is not guaranteed to be safe. So you're not really running a risk of losing the house, just the restaurant, which it sounds like wasn't as huge and issue for you. Maybe it's time your dad stopped running his own place and started working at someone else's as a head chef or something.

As far as generating additional customers, be creative. Work out the profit margins of kid's eat free, free dessert etc and offer something good. Have someone dress up as a Yeti and run around the town throwing flyers to the restaurant. Just be unique.

Hope that helped a little bit.

 

If your Dad's business is an LLC or a corporation your home should be safe. That is one of the main reasons people put companies into an LLC because of the limited liability. I'm not a lawyer though so I'm not 100% positive.

Do you have any local newspapers or magazine's that run "Best of Huntington" issues? A friend of mine always dominates those issues mainly because his friends/family stuff the sh*t out of the ballot boxes (which are usually online, so we could all help). PR can do wonders for a restaurant.

Try to think of a creative way to get some cheap PR. Maybe running a unique or amusing contest that a local paper would pick up. Or maybe a charity event. Offer a free meal to anyone who can prove they went to a NY Islander game last year. (just kidding, nobody goes to those)

The menu looks great, I miss those kinds of Italian places from the East Coast now that I am out West. As others have said, get an email list going and update people on specials for the week. Start a tell-a-friend program that offers discounts to those people who referred their friends. Maybe start a frequent diner program where people get the 10th meal free. FREE BEER!

Good luck, hope it all works out.

 

Watch kitchen nightmares. A huge menu is the first thing Gordon Ramsey cuts. Quantity just means you have more and more items you have to keep in stock and pay for. If you take shortcuts on the quality people will notice.

 

NOT LEGAL ADVISE HERE

Any time you transfer anything prior to BK has to be documented to the court.

If his corporation is filing BK it may be a Chapter 11 or 7 ... did he put the house up as security for the business? If he did that too will be documented.

This a tough way to go ... but not the end of the world even at age 57

Find a good lawyer that does BK work only and get good advise

Good luck

JQ

 

Man yo have some good advice here...It may be too late, but the reality is
most places I come across like this can be turned around in a realitively short
time, in being short I mean 3-6 months and sometimes sooner.

Large menu is always a NO NO...it is most likely one of the core reasons
for not doing so well...but the main reason your Dad is a "chef"...not a marketer
and you need some solid marketing and business advice.

I can give marketing and business advice but what is suited better is someone
in your area. I can put you in touch with a marketer if you so wish that
focuses on the marketing assets you already have and optimising them, looks for
windfalls etc...but that would cost a bit, but would be worth it...

About the home will depend on the fact if that was used to buy the business
in the first place. "PM me and will see what I can do", as I have done a lot of
Business Consulting for businesses like this and been very successful...

Don't expect miracles but what you can expect is getting things on an even keel
so it carries you through the recession...

Gone are the days when you start up a joint in town and rely on foot traffic
coming through the door, even the yellow pages ad alone won't cut it.
Email marketing "does work" when done in a certain way and is great for repeat
customers. One of the big things I find missing in this type of Business is a
Customer list - YOU NEED ONE! And they are not that hard to build if you know
how...

When you have the right marketing built into your Business it become a saleable
asset that become part of the selling price. I spend $180 on this ad once a month
and it brings in $1100 net profit everytime. I send out and email and that brings
in $400. I send letter in mail and that brings in XYZ every two months etc...

That is an asset, but when you put an ad somewhere and hope for the best that
is the blind leading the blind and you most likely will never know if it even bought
in one cent...You have to know the numbers!

This is not hard stuff or any big secrets and many Business Owners already know
this - they just fail to implement and put things into action...

 

you are on the right track, you have myspace, start adding friends in a radius of the business. add 50 a day, put a coupon code, Say: Im your friend on myspace for a discount.

 

One thing I was looking to strike up a deal here in my area, was make, package my meals, and I would pay xx a week for them. I would get good meals [ballanced] for a price about the same as if I made them, without the hassel, and the restaraunt would get guaranteed money every week.

I was about to talk to a local rest. but they closed, probably could have used my money.

 

Satellite bounced and it double posted.. OPPS!

 

Take this for what it's worth....

I have a small chain of specialty resturants in my WH business..... So I'm familiar with the P&L as well as the operational side....

Everyone above is correct... TALK TO A GOOD LAWYER. Also, TALK TO A GOOD ACCOUNTANT. In both cases they need to have experience with Resturants!!!!!!!!!!

If it takes a couple weeks to find good experienced professional help it's worth it. Any old shyster lawyer or tax only accountant won't cut it, they don't know the P&L side of the resturant business enough to be any use.

Now, the following advice (along with some of the terrific ideas from the others above) can make that resturant hum....

1) CUT DOWN THE DAMNED MENU! Don't cater to everybody. Cater to the core audience in the area.

2) BUILD A WEBSITE WITH CARRY-OUT ORDERING - I grew my customers carryout/pickup business 400% in 30 days by enabling carryout orders on their website and getting them the promotional materials to put on their tables. Servers got cards to hand out too.

3) BUILD AN EMAIL LIST - Specials for Birthdays, Anniversaries, and whenever your not busy.

4) YOUR VENDORS ARE YOUR FRIENDS - Get your primary food sales rep in there right now. They know who's hot, who's not, and what's going on. You'd be suprised to know that most of the food distributors have a full Chef's Staff onboard doing nothing but recipe building, lunch special building, etc., etc., ... They even will do Customer Satisfaction Surveys for you.

Hey, they want to push food, and they can't do that without resturants like your Dad's. Ask them for help and they'll help figure out how to get people in to eat.

5) GIVE AWAY FOOD - Got a couple Radio DJ's that are popular with your target audience? Have a cabbie deliver them the best lunch they ever had.. They'll talk about it. Same with local celebs that guest write for the local newspaper, etc. And when your family is out pushing the place with flyers take a plate of something good and shove it in peoples mouths. A flyer is a flyer.. But if someone hands gets me to taste the best ravioli I've ever had I'm gonna go there within 5-7 days to eat.. Oh, they got my email and reminded me??? I'm bringing the whole clan!

6) ANHEUSER BUSCH IS YOUR FRIEND - SAB MILLER IS YOUR FRIEND - WINE DISTRIBUTOR IS YOUR FRIEND.. They need to push the liquor and your the one selling it. Just like the food distributors they have resources, programs, and sales reps that can help if you only ask them for a special deal for a special event, banners, signs, their drivers dropping your flyers into every convenience and liquor store for you....

In the resturant business 150 Grand in debt is NOTHING... And it's nothing that SALES can't fix. Cut down the menu, get smart with promotions, get help from your vendors, and make people take notice in a positive way. You'll get customers.. Then take every customer in the house and make em feel like Royalty and let your Dad's cooking turn them into a gold mine.

 

100% accurate, I came here to write almost the same post. Go see a lawyer.

 

Its really cool to see how willing people are to help out someone in need here at bhw

 

MY DAD USE TO OWN A HUGE GOURMET RESTURANT AND COOKED FOR THE QUEEN OF ENGLAND THAT SHIT DONT MATTER WHEN A RESTURANT BEGINS TO NOSE DIVE IT DOESNT STOP PM me if you have any specific questions i grew up in the resturtant biz and once it goes bad its like the snowball effeect and theres no way out but bankruptcy

 

I go to huntington all the time I've never heard of this place.. sounds like you need a new investor or partner to stay a float.

 

Looks like the snowball already rolled down the hill and it's only getting bigger.

Starting a restaurant business is not only about cooking good food, it's about promoting it and making a name for itself....And it appeals to TASTE. Taste that is different from person to person!

What you should consider in case your dad's restaurant closes down and wants to start a more mainstream one (look at subway, quiznos and all the other sandwich shops) - a niche italian take-away will not appeal to the average customer unless they like italian everyday. You can make a mainstream take-away/diner/mini-restaurant with an italian twist to it.

1. Shorten the menu (like mentioned a billion times; when you said big menu I thought, wow michelin star kind of restaurant?!)

2. Drop a flyer/coupon into every letterbox around your area...You could do it or you could get some school kid that you trust to do it!

3. Get business cards (drop your businesscard bowl) and promote it through email marketing. Remember the opt-out link

4. Send people out with the "boards" on their back and front with: Say WE LOVE THIS and get 10% off for EVERY ORDER or something along those lines.

5. Make daily specials

6. Make a CHEAPER lunch menu

7. Try and bring in the morning traffic by lowering your COFFEE price / juice price vs. starbucks + other giants.

8. Last but not least a website is always a plus. Make sure people sees the URL when they walk by; FINE DINE-IN WITH GREAT ITALIAN @ URL ....and make it easy to remember; forget the hyphens! From the website you can even extend to be ordering out with a form + CC processing; thats down the line; usually you should just have your menu, people call you and order.


good luck though...really! it's tough times now

 

We are going through the same thing as a 46 year old and me the 39 year old, with 4 young kids...we had an awesome business but we live in a tourist area which is sort of is a double whammy... we did an LLC so our house an personal assets are safe. Everything else is fair game...Although we are trying to figure out how to pay for the personal assets once the business and liquidators come in.

Life sucks right now. We live on the Outer Banks of NC and every week there seems to be a business missing. As long as your Dad did an LLC or some kind of corp. he is fine(as far as personal property issue) but if he put house or anything else on the line...cant give advice.

If it makes you feel any better the pain is truly everywhere. Your Dad just opened a business at the wrong time in the economic cycle. Not his fault at all, people just do not have the x-tra money to spend.