Is It a Good Time to Open a Restaurant?

Recessions may create good opportunities for innovative entrepreneurs because the labor and operation costs tend to be lower than those in the good times. In the past, I discussed the mobile food truck opportunities and whether it is a good idea for hospitality students to start their own restaurant business upon graduation. Now that the restaurant industry has seen some signs of recovery and the mobile food truck idea is not “new” anymore, will it be a good time to open one’s own restaurant?

According to Tim Zagat, the Co-Founder & CEO of Zagat Survey in this Fox News video, now it is NOT the time to open a restaurant. Why?

• The food price rose 2.2% over the last year.
• Less people are going out to eat.
• 39% consumers pay more attention to food price.
• The failing rate for restaurants is as high as 60%.

Running a restaurant is tough. Competition is extremely high. Consumers are very demanding. Demand is almost unpredictable. Yet, inventory is hard to manage. Restaurant business takes long hours and an owner’s full commitment. Everything must be “perfect” because one tiny mistake could ruin it all. Do you agree with Tim Zagat’s opinion? What suggestions will you give to those who want to become restaurant entrepreneurs?