EntrepreneurshipasaRestaurateur

GiovannaMagliulo

EnglishIIIHonors
Mrs.Kopp
February26,2014


Magliulo1

GiovannaMagliulo
EnglishIIIHonors
Mrs.Kopp
26February2015
EntrepreneurshipasaRestaurateur
Theinterestandpotentialinacareerinthefieldofentrepreneurshipasarestaurateur,
somebodywhoownsandrunstheirownrestaurant,increasesconstantly.However,thatcreates
anoverwhelmingamountofcompetitionwhichmakesachievingsuccessinthiscareerfield
difficult.Qualitiesofarestaurateurincludetheabilitytolead,abilitytotakeresponsibility,
abilitytofinance,andadesiretoworkdiligentlytoachieveonesgoals.Enteringthiscareer
fieldandopeningarestaurantcanchallengenewrestaurateursandrequiresextensiveplanning
forthefuture.Becomingarestaurateurandowningasuccessfulrestaurantrequiresnecessary
education,creatingafinancialplanincludinginvestmentsandloans,andmarketingbasedon
typeofrestaurant,location,andcustomerdemographic.
Inordertoachievegoalssetbyoneself,onelookingintoacareerintherestaurant
industryshouldreceiveacollegeeducation.Aneducationbeyondhighschool,althoughnot
required,wouldstronglybenefitthepathtobecomingasuccessfulrestaurateur.Withan
overwhelmingamountofcompetition,receivingabusinessdegreewithaspecializationin
culinaryartswouldgreatlyaidinthefuturesuccessofarestaurateurandtheirbusiness(Mari).
Acollegedegreemaysetonecandidateapartfromanotherwhenitcomestoloans,investors,
andvariousotheraspectsinthiscareerfield.Someonelookingintoacareerasarestaurateur
shouldconsiderattendingoneofthetopthreeschoolsforundergraduatebusinessprograms:


Magliulo2

BabsonCollege,MassachusettsInstituteofTechnology,andUniversityofSouthernCalifornia.
AttendingBabsonCollegecosts$45,120,attendingMassachusettsInstituteofTechnologycosts
$45,016,andattendingUniversityofSouthernCaliforniacosts$48,280(U.S.News&World
Report:Colleges).Thesehighlyrankedschools,althoughcostly,wouldprovebeneficialfor
futurebusinesssuccess.Studentsapplyingtoanyofthethreecollegescanconsiderfinancialaid
andscholarshipsinordertoattendoneofthethreecollegewithoutacquiringamonstrous
amountofdebt.Afterreceivingfurthereducation,moreopportunitiesbecomeavailable,
includingtheopportunitytobeginmakingasubstantialsalary.
Whenitcomestodecidingwhatcareerpathsuitssomeonebest,onemusttakea
multitudeoffactorsintoconsideration.Formanypeople,salaryremainstheirmostimportant
factorwhilemakingcareerdecisions.Thesalaryforarestaurateurvariesgreatlydueto
uncertaintyofwhetherornotaspecifictypeofrestaurantwillsucceedandalsohowmanyhours
arestaurateurlookstoputintotheirbusinesseachweek(Mari).Somecannothandlethe
instabilityandneedaguaranteedsalaryofacertainsize.However,ifonecanoverlookthis
instability,endlessopportunitiesforprofitswillcome.Thesalaryforarestaurateurcanrange
anywherefrom$25,000to$200,000dependingondesire,drive,andhoursputinweekly(Mari).
Whilethestartingnumberseemslowtomany,theroomforgrowthconstantlymultiplies.
Whenpeoplemakethecareerchoicetobecomearestaurateur,theytakeontheroleof
authorityastheirownbossandthebossofagroupofpeopleaswell.Thischoice,whilevery
liberatingformost,comeswithalotofresponsibility.Ittakesacertaintypeofpersontoachieve
successinthiscareerfieldandacceptthatresponsibility.Theamountofnewbusinessventures
dependsolelyonavailabilityofpeoplewillingtogointothiscareerandwhoappearstopossess


Magliulo3

thenecessarycharacteristics.Studiessuggestthatpeoplewhopossesscertaincharacteristicsand
personalitytraitshaveamorelikelychanceofsucceedingthanothersasanentrepreneur(Jainet
al125).Withoutpeoplewhopossessthesecharacteristics,thefieldofentrepreneurshipcannot
flourish.Anentrepreneur,suchasarestaurateur,mustbeendowedwithinnovationand
creativitywhilehavingpracticalviewsinbusinessandeffectivelyrunningabusiness.Alevel
headedpersonlookingtohearfeedback,whetherpositiveornegative,provesmorelikelyto
succeedthanothers(Jainetal127128).Someonelookingtoownandruntheirownrestaurant
mustalsoconsidertheamountofhoursthatmustpersonallybeputintothebusiness,especially
whenfirststartingout.Onaverage,anewrestaurateurworks70to80hoursaweekandanew
businessessentiallyconsumesallofonestimeandattention(Mari).Byasignificantmargin,
thatamountofhourseachweekexceedsthenormalformostjobs.Infact,oneofthemain
reasonsforpeopleleavingthisindustryistheamountofhoursonemustputinweekly(Mari).A
scarceamountofpeoplecansaythattheypossessallessentialqualitytraitsinordertohavethe
highestchanceofsuccess.Arestaurateurmustidentifyandselecttherightopportunitiesfora
newbusiness,anabilityandresponsibilityamongthemostimportantforarestaurateur.A
restaurateurmustmakedecisionsthatwillpotentiallyyieldthemostprofitforthebusiness(Jain
etal125126).Alongwiththechallengingresponsibilitiesofarestaurateurandholdingpower
ofallbusinessdecisionscomescolossalrisks.
Therisksofbusinessventuresandowningarestaurantmultiplyconstantly.Theriskof
failureinentrepreneurshipremainssignificantlygreaterthantheriskforothercareerfields.
However,manystudiesplaceanemphasisonthebenefitsofbusinessfailure.Allentrepreneurs
attempttomakesenseofwhytheyfailedandturningitintoalearningexperiencecanassistin


Magliulo4

thisprocess.While,unfortunately,arestaurateurmaynotsucceedandtheirrestaurantmaynot
lastlong,restaurateurscanviewtheoverallprocessasapositivelearningexperience(Heinze
21).Manyentrepreneursalsoplacetheblameonotherpeopletojustifytheirbusinessfailure.
Placingblameonsomeoneelseallowsentrepreneurstomoreeasilymoveonfromthe
unsuccessfulbusinessventureandfeellessemotionallydistraught(Heinze34).Entrepreneurs
oftenblamefailureonthirdpartiesorvariablesoutoftheircontrol(35).Arestaurateurmight
blamehisorherfailureonvariablesuchasbadeconomy,priceincreaseforcapital,or
insufficientemployees.Whileallrestaurateursfacechallengesandrisks,womentendto
strugglemorethanmenwhenlaunchingtheirownbusiness.Womenspastsocialstatusand
entrepreneurshipopportunitiesmayaffecttheiropportunitiestoday,somestillviewwomenas
inferiorinthebusinessworld(Constantinidisetal137).Studiesshowthatwomentendtobegin
newbusinessesintraditional,lowgrowthindustries,suchastherestaurantindustry,whichhave
alowchanceofgrowthandthistendencyitselfisarisk(135136).Somesuggestwomendonot
takeadvantageofallpossibilitiesandpathsavailablewhenfinancingabusinessandhowto
makethemostimpactfulbusinessdecisions(138).Properfinancingandinvestorscanhelp
avoidsomeoftheinevitableriskandfailurethatcomealongwithacareerasarestaurateur.
Financially,womentendtofacemorechallengesandobstaclesthanmendo.Studies
showthatwomencommonlyborrowmoneyfromfriendsandfamilyorusepersonalcreditcards
tofinancetheirbusinesswhilemengenerallytakealoanfromabankandseekoutlarge
investors(Constantinidisetal134).Partofthereasoningbehindthisdecisionisthatwomen
mustputinmoretimeandeffortthanmeninordertoconvincebankersorinvestorsthattheir
businesswillmakesubstantialprofits(147).Ifaninvestororbankdoesnotseetheopportunity


Magliulo5

forgrowthandsuccessforabusinessthanthechancesoftheminvestingdiminish.Female
characteristicsandpersonalitytraitshaveaneffectontheirfinancesaswell.Factorssuchas
education,experience,businessrelationships,andbusinessstyleallaffectfinancingandrunning
theirbusiness(137).Mentendtopossessmorebusinessexperiencethanwomenandtheir
businessstylesprovemoresuccessfulthanwomen.However,morewomenareenteringthefield
ofentrepreneurshipthaneverandtheyfindmethodsforsuccess.Creatingafinancialplanand
searchingforoutsideinvestmentscanhelpeliminatesomeoftherisksandchallengesthat
womenface.
Arestaurateurplanningaheadforonesbusinessmusttakemanycomponentsinto
considerationpriortoventuringout.Financingthebusinesswiththemostsuccessfulmethod
possibleprovesoneofthemostchallenging,yetimportant,componentsinanewbusiness.
Investorsremainacrucialcomponentoffinancinganewbusiness.Arestaurateurcanchoose
frommanydifferenttypesofinvestors,acrucialdecisionregardingwhichonebenefitsthe
businessmost.Arestaurateurwhorequiresasubstantialamountofmoneytostarttheirbusiness
andstrugglesfindingotherinvestorsshouldconsideranangelinvestor(FinancingaNew
Business).Anangelinvestor,someonewillingtoinvestlargeamountsofmoneyandtake
higherrisks,benefitsabusinessgreatlywhenlookingtoputalotofmoneyintoabusinessin
ordertoeventuallygainmoreprofits.Smallerinvestorsalsoremainasufficientoptionwhen
lookingtoavoiddebtorwhennotinneedoflargeamountsofmoney.Analternativeoptionfor
findingindividualinvestors,restaurateurscanlookintodifferentwaystosuccessfullyfinance
theirbusiness.


Magliulo6

Whenlookingtofinanceabusinesswithoutintroducinginvestors,equityfinancingand
loanfinancingcanbothprovidesuccessfulpathsforfinancing.Equityfinancing,money
introducedintothebusinessbytheownerorowners,successfullyacquiresnecessaryfundsto
launchabusiness.Equityfinancing,whileprimarilyusingmoneyintroducedbytheownerof
thebusiness,canalsousemoneyintroducedfromoutsidesources.Ifarestaurateurchoosesthis
option,investorsexpecttheirmoneypaidbackindividends,awardedannuallyandoftenasmall
amount,ortoreceiveashare,orpiece,ofthecompany(FinancingaNewBusiness).Equity
bestsuitscompaniesexpectedtogrowquickly.Loanfinancinginvolvesmoneylenttothe
businessownerbybanks.Thisoftengetspaidback,withinterest,overalongperiodoftime.
Therateofinterestgenerallyreflectshowthebankorsourceprovidingtheloanviewstheriskof
thecompany(FinancingaNewBusiness).Abankmaygiveanextremelyhighinterestrateto
restaurateurswhentheyrequestloansduetothefactthatrestaurantsandpersonalbusiness
ventureshavehighchanceoffailure.Equityfinancingmaymorehighlyintriguearestaurateur
astheywillnotreceiveahigh,fixedorincreasing,interestrateasthemethodofrepayment
(FinancingaNewBusiness).Restaurateurscangivedividendsorsharesaspaymentforloans
andequityinvestments.Choosingatypeofinvestororinvestmentisacrucialdecisionand
responsibilityofarestaurateur.Notonlymustarestaurateurchooseaninvestor,butalsohow
theywilldivideandspreadfinancesamongdifferentaspectsofacompany.
Afterarestaurateurreceivesthenecessaryfinancialbacking,theybeginplanningthe
divisionofmoneytodifferentaspectsofthebusiness.Arestaurateurshoulddividethefinances
whilekeepinginmindtheamountoffundingneededforthefutureofthebusinessandhow
muchfundingtheypossessatthattime(FinancingaNewBusiness).Divisionoffinances,an


Magliulo7

importantprocessintherestaurantindustry,cancauseinconvenienceduetothesimplefactthat
manycomponentsmustcometogether.Labor,equipment,supplies,utilities,andmarketing
merelyrepresentafewexamplesoftheexpensesthatcomealongwitharestaurant.A
restaurateurcanplanmorestableexpenseslikelabor,equipment,andutilitieseasilyandaheadof
timewithcertainty,expenseslikesuppliesandmarketingproveamorechallengingtask(Mari).
Suppliesforarestaurantincludefood,beverages,servingtools,cookingtools,cleaningsupplies,
soonandsoforth.Marketingincludesnewspaperadvertisements,websites,businesscards,and
commercials.Thisaspectdiffersbasedonneedformarketing,availability,andvariety.
Requiredsuppliesandmarketingcanvaryfrommonthtomonthorbasedonthetypeof
restaurantanddemand,hinderingtheideaofplanningaheadperfectlyforsupplypurchases
(Mari).Arestaurateurcanonlyplansomuchwhenitcomestodivisionoffinanceswithintheir
business.However,planningfortheseaspectsremainsakeycomponentandarestaurateur
shouldlookintoeachaspectindividually.
Marketingcanacceleratethepopularityandprofitsofabusinessifexecutedwell.Italso
providesawaytomakeabusinessstandoutagainstcompetitors.Restaurateurscanchoosefrom
manydifferentformsofmarketingandoneshouldchoosetheformthatbestsuitstheir
restaurantandwouldreachthehighestvolumeofpeoplepossiblewhilecostingtheleastamount
ofmoney(Mari).Choosingwhichformofadvertisementwillworkbestforacompanyandpull
inasmanycustomersaspossiblecandifferbasedoncustomerdemographicandlocation.If
lookingtotargetanolderdemographic,mailornewspaperadvertisementsmayworkmore
efficientlythanothermethods.Whereasforayoungerdemographic,onlineadvertisementsand
emailwouldmostlikelyreachmorepotentialcustomersthanothermethods.Methodssuchas


Magliulo8

televisioncommercials,radioadvertisements,businesscards,andwebsitesgenerallyreacha
widevarietyofpeople.Arestaurateurshouldalsotakecompetitorsintoconsiderationinorderto
createanenticing,memorableadvertisementthatwilldrawinmorecustomersthanthe
competitors(Mari).Whilethismaycostmoremoney,itwillpayoffinthegrandschemeof
things.Advertising,despitecost,remainsasanimportantinvestmentthatarestaurateurmust
stronglyconsiderinordertocreateasuccessfulbusiness.
Thetypeofrestaurantlocationarestaurateurchoosestoopenuptheirrestaurantin
heavilyimpactsthepotentialforsuccessandcouldmakeorbreakanewrestaurant.A
restaurateurshouldmakethisdecisionbasedoncompetition,customerdemographic,and
personalpreference(MarketSummary).Certainlocationscandrawinmorecustomersora
certaintypeofcustomerbasedonothersurroundings.Arestaurateurshouldalsotake
competitorsintoconsideration.AntonioMari,asuccessfulrestaurateurandcurrentownerof
SorrentosPizzeria,claimsthatarestaurateurshouldseriouslylookintowhetherornotsimilar
establishmentsexistnearonesrestaurant(Mari).Ifarestaurateurplacestheirrestaurantneara
similarestablishment,theymaylosecustomersandprofitscouldgreatlydecrease.However,if
onesrestaurantappearsuniquetoitssurroundingsthenprofitsandamountofcustomerscould
potentiallyincrease.Studiesalsoshowthatcommunitieswithfewplacestomeetwithfriends
andfamilyandhighlyrecommendedassomewheretoopenarestaurant(Miles,NilesandTorres
74).Peoplesearchforacommunityfriendlyplacewheretheycanmeetupandmanyfinda
restauranttobeagoodsolutiontothis.Notonlydolocalssearchforameetingplace,butsodo
tourists.Tourismgreatlyaffectsthesuccessofarestaurant,as31%ofconsumersreportthat
theyspendaportionoftheirsalaryontravelingandrestaurantsmakeupagreatdealofthe


Magliulo9

amountofmoneytheyspendwhileonvacation(Miles,Niles,andTorres74).Restaurants
placedinhighlyvisitedareaswithamultitudeoftouristshaveagreaterchanceofsuccessthan
otherrestaurants.SomeareasthathaverestaurantswithhighersuccessratesincludeLasVegas,
Hawaii,andNewYork(76).Afterchoosingalocationthatcanassistinthesuccessofones
restaurant,onemustbeginplanningthefinerdetailsofarestaurantsuchasamenu.
Themenuforarestaurant,acrucialcomponent,shouldreflectthetypeoffoodservedat
therestaurantandthetypeofcustomerdemographiconewantstotarget.Arestaurantcanuse
theirmenuasaverysuccessfultoolforenticingcustomersandpushingcertainitemsinthe
restaurant(Rowe38).Ifamenuprominentlydisplaysaparticularitemthenitmaypersuade
customerstochoosethisitemratherthananother.Arestaurateurshouldconsiderplacingmore
popularorexpensivedishesprominentlyonthemenu(Rowe40).Arestaurateuralwayslooksto
selltheirmoreexpensiveitemsandthemenucanaidgreatlyinthisprocess.Appearance,
anotherimportantaspectofamenu,shouldreflectthetypeofrestaurantanddrawinacustomers
attention.Inordertoachievethis,noteveryphotoanddescriptionshouldbethesamesizeor
havesimilarcharacteristics(Rowe40).Differentsectionsofamenushouldshowcreativityand
uniquequalities.Anenticingmenubringscustomersin,howeverarestaurateurshouldupdate
themenuperiodicallyinordertokeepcustomershappyanddrawthemin(42).Menus,
dependingontype,shouldberevamped,updated,andimprovedeverysooftenascustomersget
boredofthesameexactthingallthetime.
Overall,entrepreneurshippositivelyaffectstheeconomyinmanyways.
Entrepreneurshipenablesstructuralchangeandregionaldevelopmentgeneratingemployment
whilealsopromotinginnovation,producingcompetition,andincreasingwealth(Jainetal122).


Magliulo10

Thus,makingentrepreneurshipasuccessfultoolforeconomicgrowthanddevelopment.
Entrepreneurshipsuccessfullyintroducesnewproductsandservicestoconsumers(Jainetal
123).Consumersconstantlysearchfornewandexcitingproductsandservicestoobtainand
entrepreneurshipcancreatetheidealopportunityforthis.Whilefindingpassionate
entrepreneurstoenterintotheindustry,especiallyasarestaurateur,isanexistingissuedueto
manyfactorslikeextremelylonghoursandalackofdesiretoputinhardwork,thepeoplewho
doentercanimpacteconomyandconsumersgreatly(Mari).Arestaurateurcanimpactthe
economywhileusingtheircareerpathasacreativeoutletandallowingconsumerstodiscover
newservicesandproducts.
Acareerinthefieldofentrepreneurshipasarestaurateurallowspeopletocreatetheir
ownsuccessfulbusinessbyfullyinvestingthemselvesintheirwork,usingtheircreativeabilities
tothefullest,andbecomingaleader.Whilemanycannottacklethetaskoftakingresponsibility
forallbusinessdecisionsandoverlooktheuncertaintyandriskthatcomesalongwithbecoming
arestaurateur,thosewhocanmanagetorunasuccessfulbusinessandhaveendlesspossibilities
forgrowthandsuccess.Thiscareerpathcomeswithasubstantialamountofuncertaintyand
instabilityregardingmanyfactorsaswellasatremendousamountofresponsibilityand
commitment,howeverwithgreatriskcomesgreatreward.Withrequirededucation,afinancial
andbusinessplan,andqualitymarketingwithconsiderationfortherisksandrewardsofthe
industry,arestaurateurcanachieveimmensesuccessandcreatealastingimpactontheeconomy
andconsumersinafavorablewaywithpersonalgainalongwithit.


Magliulo11

WorksCited
"BestUndergraduateBusinessPrograms."U.S.News&WorldReport.U.S.News&World
Report,LLC.,n.d.Web.8February2015.
<
http://colleges.usnews.rankingsandreviews.com/bestcolleges/rankings/business
>
Constantinidis,Christina,AnnieCornet,andSimonaAsandei."FinancingOfWomenOwned
Ventures:TheImpactOfGenderAndOtherOwnerAndFirmRelatedVariables."
VentureCapital8.2(2006):133157.BusinessSourceComplete.Web.5January2015.
<
http://search.ebscohost.com/login.aspx?direct=true&AuthType=ip,custuid&custid=s845
5861&db=bth&AN=20470329&site=ehostlive
>
"FinancingANewBusiness."BloomsburyBusinessLibraryActionlists&Checklists
(2007):117.SmallBusinessReferenceCenter.Web.2January2015.
<
http://search.ebscohost.com/login.aspx?direct=true&AuthType=ip,custuid&custid=s845
5861&db=b9h&AN=26758943&site=ehostlive
>
GUGA,Lucian."ResearchOnInvestmentEstimationWhenDecidingToStartANew
Business."BulletinOfTheTransilvaniaUniversityOfBrasov.SeriesV:Economic
Sciences7.1(2014):8588.BusinessSourceComplete.Web.4December.2014.
<
http://search.ebscohost.com/login.aspx?direct=true&AuthType=ip,custuid&custid=s845
5861&db=bth&AN=97253862&site=ehostlive
>
Heinze,Ilka."EntrepreneurSenseMakingOfBusinessFailure."SmallEnterpriseResearch20.1
(2013):2139.BusinessSourceComplete.Web.4January2015.
<
http://search.ebscohost.com/login.aspx?direct=true&AuthType=ip,custuid&custid=s845
5861&db=bth&AN=94885576&site=ehostlive
>


Magliulo12

Jain,Ravindra,andSaiyedWajidAli."AReviewOfFacilitators,BarriersAndGatewaysTo
Entrepreneurship:DirectionsForFutureResearch."SouthAsianJournalOfManagement
20.3(2013):122163.BusinessSourceComplete.Web.5January2015.
<
http://search.ebscohost.com/login.aspx?direct=true&AuthType=ip,custuid&custid=s845
5861&db=bth&AN=91873177&site=ehostlive
>
Mari,Antonio.PersonalInterview.10February2015.
"MarketSummary."Restaurant,Food&BeverageMarketResearchHandbook15.(2014):2634.
SmallBusinessReferenceCenter.Web.4December2014.
<
http://search.ebscohost.com/login.aspx?direct=true&AuthType=ip,custuid&custid=s845
5861&db=b9h&AN=95942113&site=ehostlive
>
Miles,Kristen,HannahNiles,andJohnTorres."TheBest&WorstPlacesToOpenA
Restaurant."RestaurantBusiness113.10(2014):7476.SmallBusinessReference
Center.Web.3December2014.
<
http://web.a.ebscohost.com/ehost/pdfviewer/pdfviewer?sid=99ce85e18db34d9fb2fde
31353116df7%40sessionmgr4003&vid=21&hid=4109
>
Rowe,Megan."MAKEYOURMENUGREAT.(CoverStory)."RestaurantHospitality87.10
(2003):35.MasterFILEComplete.Web.4December2014.
<
http://search.ebscohost.com/login.aspx?direct=true&AuthType=ip,custuid&custid=s845
5861&db=f6h&AN=11063553&site=ehostlive
>


Magliulo13