Pros and cons of opening a cafe after retirement

[Anonymous]

It's hard work.

I know a couple who did this, opened a lunch only restaurant (not DC area, economically depressed area with lower prices). Served sandwiches and hot dogs, basically a grill, and did ok as it beame a retired person gathering spot.

Not sure a lunch only restaurant would be profitable here.

[Anonymous]

Good cafes are fun and relaxing to spend time in, but it takes a ton of work and commitment behind the scenes to create that atmosphere. It’s sort of like going on vacation and thinking you want to move to that place because everything’s so great there.

[Anonymous]

Anonymous wrote:Yes this is idiotic. You are envisioning the Hallmark movie version of owning/running a cafe. The reality is super early mornings, constantly paying bills, never being able to find reliable staff, constantly dealing with stuff breaking, etc. It's like the stress of home ownership, being the boss, and having a new baby, but all at once and rolled into one thing. And you will not make any money. Even if you tough it out and it's successful, it will take 5 years before you see any money, and then you still might just be scraping by. It is not a retirement job, at all.

I do think it's possible to start a retirement business that isn't like this. The ones I've seen that worked were some kind of skill teaching where you rent space and start small (teach a few classes a week). I've known people who did this teaching dance to kids, and teaching music, and eventually expanded it into a bigger business with employees where they had their own space. But the key was that they were starting with something they had real skill and experience in, so it was fairly easy for them to find their initial customers and build from there. With a cafe, you are selling to the general public, and the thing you are selling is not grounded in your skill or experience unless you've been working in cafes all your life. So you're a newbie in a field with a very high fail rate. It's not worth it.

Most dance studio owners make very little money, in spite of dance lessons costing so much. Qualified dance teachers get paid upwards of $40-$50/hour. When you factor in employer taxes, and paying employees for non teaching hours like recitals, performances and competitions, the payroll really shoots up. They don't need a lot of stuff, but they do need a lot of floor space, so rents are quite high. They aren't buying inventory, but they need to purchase specialized sprung dance floors, which are very pricey even with a DIY method.

I know a lot of dance studio owners. The majority of them aren't making very much money at all, especially when you condider that most of them are putting in 60+ hour weeks most weeks of the year.

[Anonymous]

Anonymous wrote:It's hard work.

I know a couple who did this, opened a lunch only restaurant (not DC area, economically depressed area with lower prices). Served sandwiches and hot dogs, basically a grill, and did ok as it beame a retired person gathering spot.

Not sure a lunch only restaurant would be profitable here.

I don't know if lunch-only is the way to go, but I agree with the idea that this is not the right choice in the DMV area. Commercial rents are too high, labor is really expensive, there are a lot of regulations and fees. It's a bad place to start a small business from scratch in general.

But there are a lot of lower cost of living places where starting a small "retirement business" would be less risky because your overhead would be lower and there are fewer pitfalls. In fact if this were me, and I wanted some kind of retirement project and to see if I could make a business like this work, I'd want to be living somewhere that I could BUY a small commercial space for this purpose. Then see if you can make a business go in the space, if it works and you get what you want, great. But if it doesn't work or it turns out you don't enjoy it, you've got a property you can sell or rent out. If it's set up as a cafe, you even get the benefit of the kitchen/store front infrastructure, which will enable you to charge higher rent to a business coming in.

My dad has done stuff like this many times. He's in real estate development. But he's started a myriad of businesses in various properties he's picked up. Some have become very successful and he's sold the whole business years later for a lot of money. Others failed, but his losses are minimized because he owns the property (also you can use your losses as tax benefits against profits). It's worked out really well for him. He even owned a cafe at one point, which he basically handed over to my sister and her husband to run. It failed, but they got experience running a business, my dad was then able to sell the cafe to another business, it all worked out.

[Anonymous]

I know someone who did this, and it’s successful. It can be done.

[Anonymous]

If you really want it to work you have to plan well. First spend some time working in a cafe understanding the business (assuming you don’t have any background). Next step would be to open a catering or a takeout only business so you get feet a bit more wet. Once you build up a good reputation, have good customer feedback etc open a full fledged cafe.

[Anonymous]

Anonymous wrote:Good cafes are fun and relaxing to spend time in, but it takes a ton of work and commitment behind the scenes to create that atmosphere. It’s sort of like going on vacation and thinking you want to move to that place because everything’s so great there.

That’s from customers’ perspective not the owner/operator.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Good cafes are fun and relaxing to spend time in, but it takes a ton of work and commitment behind the scenes to create that atmosphere. It’s sort of like going on vacation and thinking you want to move to that place because everything’s so great there.

That’s from customers’ perspective not the owner/operator.

Right, but if OP’s never done this kind of thing, then I’m assuming the customer’s perspective is what they’re going on. It’s quite likely that they don’t really want to own or operate a cafe, they just want to spend lots of their leisure time in one.

[Anonymous]

I know someone who did something like this. It lasted about five or so years, with Covid in the middle, but she had to close it. Now she and her husband are getting divorced.

Are the business and the divorce related? Who knows? But the stress of the one certainly could have affected the other.

[Anonymous]

Food business is really tough OP. Don’t be idealistic.

[Anonymous]

Could you work for a cafe owner first and see how things go

[Anonymous]

Anonymous wrote:Yep, setting money on fire. 95% of new restaurants go under within 1-3 years.

Yep. The year after HS, some friends and I thought we'd have a cafe. Even though we all had experience in food service, we were setting money on fire, so we had a consultation with a retired business man who told us that we needed enough liquidity to float the place for at least five years, maybe ten. So we got out. It was an expensive lesson.

[Anonymous]

Anonymous wrote:I know someone who did something like this. It lasted about five or so years, with Covid in the middle, but she had to close it. Now she and her husband are getting divorced.

Are the business and the divorce related? Who knows? But the stress of the one certainly could have affected the other.

I know someone who tried to start a dinner prep franchise store. I don't know if those exist anymore. The kind of place where they have precut foods half-prepped and you pay to come and assemble meals onsite that you take home and freeze or put in the oven. Stress over this business definitely contributed to a divorce. They also had connected their house equity into financing the business. So that was also a mess.

[Anonymous]

Anonymous wrote:Could you work for a cafe owner first and see how things go

This is the best advice. Find out what it takes to run a cafe (time, effort, costs), then create a business plan on where to open a cafe.

You can do everything right but the wrong location or catering to the wrong clientele will see you in BK court.

For instance, having a cafe playing Honky Tonk & Country music in a predominately Black precinct probably isn’t going to do that well. You will need to switch to Jazz or try a more rural area near the tobacco fields and hope enough people show up to keep you in business.

You also have to look at competition. A generic cafe near 10 others means you need something to stand out.

I recommend watching several episodes of Bar Rescue. You will be amazed at how many people opened a bar not knowing what they were getting into. Some of those people aren’t qualified to run a lemonade stand.

[Anonymous]

I would only allow Rachel, Joey, Chandler, and Monica to hang out at my café. Ross is a dork, and Phoebe is annoying.