How To Close A Restaurant, Told By Someone That Knows

Eating out is a wonderful thing and most of the time is a complete joy, the bustle of the dining room, the clinking of wine glasses and low murmur of people having conversations about everything and nothing all at the same time. But what we don’t see and what very few people talk about is the stress and exhaustion that the people working behind the scenes, the owners, chefs and so on go through on a daily basis as well as their other daily battle of them just keeping their heads above water financially.

Very few people talk about failure, in this day and age its seen as a dirty word, very much like admitting to friends that you aren’t busy, it somehow means you aren’t doing well. But one restaurant owner told EATER her story of how after 7 years, her and her co-founder husband decided to call is quits and close their 2 restaurants and the list of emotions and protocols that go with it. The following is original content told by Alex Pemoulie for EATER.com

I have always found restaurants to be inherently romantic. I say this not as a diner, but as someone who has worked in them, owned them, lived in them, and loved them. My entire adult life has taken place in restaurants, and I find them romantic in the same way marriages are: They are nostalgia experienced in real time. They each have a unique heartbeat. They require every ounce of who you are, and then they use it up and ask for more.

I have opened and sold two restaurants in the past seven years, one on each coast. Both I owned with my husband, Kevin. We fell in love, first with each other, and then with the restaurants we built. We worked tirelessly and endlessly to make them successful. They provided the backdrop to our lives. We saw them both as integral parts of the future, and each one took its turn being our entire universe.

Then, eventually, tragically, each of our restaurants came to the point in its life cycle where we no longer had anything to give. We were tapped. I was used to running on fumes, digging deep, and slogging through, but eventually I reached my limit. Three years into our first restaurant, Thirty Acres in Jersey City, New Jersey, I gave birth to a perfect, yet massively colicky, baby girl. My and Kevin’s dream of owning and operating a restaurant together started to crumble: Despite my best efforts, the kitchen was simply too loud and hot to carry Viv on my back while I expo-ed the pass. Now here I was sitting at home with a crying baby while my husband worked endless hours at the restaurant to cover both of our hours. As the months went on and business naturally slowed, cash became tighter, and the scale shifted. The negatives started outweighing the positives, and it became painfully clear that it was time to move on. We found a buyer through a friend and spent a year negotiating the sale.

Two years later, when we were a year into our second restaurant, Mean Sandwich in Seattle, we knew enough to recognize the signs of burn-out earlier. We had hoped that a different kind of restaurant, a sandwich shop without table service, with day business instead of nighttime, would alleviate our problems. We had dreams of opening two or three locations, catering parties, and throwing pop-ups with industry friends. We did some of that, but we also worked as much as we ever had, filling in on the line every day and working opposite shifts. We knew we would never make money with only one location, but we found ourselves hesitating to take on the additional debt necessary to open a second location. Once again, we were rarely able to spend time together as a family, and we brought our stress home with us when we did. We felt trapped. We both desperately wanted out and had no idea where to start.

Eventually we did find a buyer, and our sandwich shop lives on under his ownership maybe even more successfully than it did under ours. It stuck with me, however, that while there had been so much advice available when we were opening our restaurants, so many restaurateurs writing books and making podcasts and telling their stories, no one ever seemed to want to talk about what to do when it was time to call it quits. How do you end a relationship that was meant to go on forever?

So, to that end, I’m here on the other side of both to give you the advice I wish I had received. If you own your own restaurant, or just dream of opening a restaurant one day, I wish you good fortune and success. Have faith; you will need it. Work as hard and as smart and as much as you possibly can. Know, though, that risks are rewarded because they are exactly that. Have a plan for what you would do if things start to go south. Here’s where I would start.

Know when to call it quits

I don’t say this lightly: This is by far the hardest step. It means facing the fact that this thing that you’ve dreamed of, that you’ve spent so many hours building and loving, just isn’t working out. You admit to yourself that you’re not happy at work and that it’s not going to get any better.

So much of restaurant ownership is based on believing in yourself and your idea when no one else does; when the fumes of that faith are extinguished, there’s nothing else to face but the cold reality that no one is going to save you and you need to cut your losses and quit.

It will feel wrong. It will feel horrible. Every children’s story you’ve ever read has taught you to be stubborn and tenacious. Every Ted Talk and business manual promises the same thing: Work hard enough and you will make it. Closing a restaurant means staring directly at your reflection and seeing a quitter staring back at you. It will be terrifying. Embrace it. Admitting defeat feels like acceptance, and that acceptance is what you need to escape.

If it helps, I’ll let you in on something I’ve learned: Dreams can die. It’s okay! You will not die just because your dream has. There will be more; it just takes time. Often, your dreams will change. Mine definitely did. As I get older, I find that financial security and time with my family are necessary for my happiness. Knowing these things puts limits on what risks I will take, but it also helps me put my dreams into focus, because I know what I want and that has allowed me to think more creatively. I have learned that it’s important to separate my dreams from my earning potential. When you tie the two together, as I always have, you run the risk of living a very one-dimensional life. I have never found the old adage that “if you do what you love for a living, you never work a day in your life” to be true. Instead, I find that the very process of trying to make money doing what I love robs it of its value. When I do what I love for a living, it means I never stop working.

List your business for sale

Specifically, you need to get your business onto a Commercial Brokers Association listing service (the MLS, also known as a multiple listing service). It’s like Zillow, but for businesses. Depending on which state you are in, you may need to find a real estate agent to do this. Chances are, it will not sell. We sold both of our restaurants through personal contacts, not the MLS. If you don’t know why, go on a commercial MLS site and check out what’s already there. Your favorite restaurant may well be listed. Everyone is listed there, because everyone would like to sell. It’s the best possible outcome of a closure. You have nothing to lose except people finding out, but since everyone is on there anyway, go for it. You need to try everything.

When we listed our second restaurant we were shown quite a few similar “comp” restaurants for sale: a barbecue restaurant nearby that did $1 million a year in catering sales, a Greek restaurant in an area with prime street traffic, a Tibetan restaurant that was always full, a cute cafe with great coffee but no hoods. Listing our restaurant made us feel like we were part of a club we hadn’t known existed: restaurant owners who were tired and who either aggressively or passively hoped someone with a bit more energy would swoop in to take up their cause.

Set a make-it-or-break-it date

You’ve now accepted and started preparing for the likelihood of closure. This is the time to reflect on how exactly how you failed. I don’t mean mulling over the details of your mistakes (yet), but rather, what metric are you using to judge your failure? Is it money? Awards? Popularity? What is the thing that you need and don’t have? To put more positively, is there one specific thing that, if it did change, would keep the spark of faith alive? If it exists, identify what it is and then set a date that it needs to happen by. Make it something very concrete and reasonable, and don’t be easy on yourself. Then, put everything you have into making it happen. Whatever fumes are in the tank, use them. Tell your family you will not see them until the date you’ve set, and warn your employees that it’s crunch time. Do every single thing that you can afford to do and haven’t done yet. This is it.

At Thirty Acres we believed that if we could find a way to spend more time together, we would be happy. Kevin wanted to spend more time with our daughter, and I wanted to be more involved at the restaurant. We came up with a plan to simplify the restaurant: We switched to a tasting-menu format, which allowed us to know exactly how many diners to expect each night and what they would be eating. It made kitchen and cost management more streamlined and took the pressure off Kevin to deal with the randomness of a regular service. It got good reviews, and some regulars loved it, but it was a terrible fit for the neighborhood. It eventually replaced one stress with another: We were spending more time together as a family, but we were also broke. We still needed to sell.

Alternatively, if you are like we were a year into Mean Sandwich, and you are tired, so tired, and the thought of trying another marketing effort or debuting a new special makes you want to take a nap: Congratulations, you are ready to close your restaurant. Move on to the next phase.

Plan the ending

This step, if you let it, can be fun. It’s a lot like opening a restaurant! Make a huge calendar and hang it on your wall and start marking dates. Start by setting the date that you will be closed and then work backwards. It’s probably best to set this date a couple months out, as there’s a lot to do before then and you need the cash. On the other hand, if you’ve already run out of money, do it by a date that is as soon as is humanly possible, but that still allows you to afford to pay your employees and vendors. Tell your landlord at the last possible moment allowed by your lease. The only reason not to do that is if you think there’s any chance they will give you a few months rent-free to help you out. Be sure, though, because once that cat is out of the bag, it can’t be stuffed back in.

I can’t tell you when to tell your employees. In a small business, these relationships are extremely personal. You should never wait until the last minute: Give them two weeks’ notice at a minimum. You depend on your employees’ work as much as they depend on their paycheck, and most of them will absolutely start looking for work the second you tell them you’re closing, as they should. If you know this to not be the case, if these are people you have worked with for years and whom you consider family, as I did in my businesses, tell them as soon as possible. Tell them the truth, and tell them the day that you expect they will be out of work. Promise them that you will do whatever it takes to make sure they have a paycheck until then. Ask them as a favor to stay on until the end, but tell them you will love them even if they don’t. Remember: This was your choice to open a restaurant, and it’s your mess to clean up. You are not entitled to someone else’s labor.

Tell your vendors when you make your last order and pay for it cash on delivery. Do not stiff your vendors because you are closing. Again, these are real people with real businesses, real bank accounts, and real families, and they didn’t get you into this. Clean up your own mess.

Lastly, tell the public one week before you close. You’ll know what to say. Thank them. Do not complain to them or about them. Be honest about your struggles if you want to, but be clear: You are closing your restaurant because you are tired, and you don’t want to do it anymore. That’s it. Own it. You will regret saying anything else.

Close

Turn the sign over. Turn the lights off. Give the keys back to the landlord. Cry.

Tie up loose ends

Process your final payroll. Show your employees how much you appreciate them for sticking with you by paying them what you owe them. Tell the city and the state that you’re done. Pay your final sales tax and business taxes.

Grieve

Take a breath. You’re through and you’re alive. Have a glass of wine if you want to. Take a trip you wouldn’t have been able to take when you owned the restaurant. Go to therapy. Process how awful that was. Read a book. Work through the doubt. Be thankful.

Get back to work

Take stock of everything you’ve learned and set some goals for what you want to be different in your life. If you have debt left over from your restaurant (we definitely do), set a goal of when you want to pay it off, and come up with a plan to do so. Talk to new and different kinds of people about their dreams and how they’ve achieved them. Try things out.

I’m still figuring out what my next dream is, but I’m giving myself time. After selling our restaurants and admitting we were done, I found myself overwhelmed with gratitude for the independence I had gained. In many ways, that was a gift in itself. I found a senior position at a well-regarded restaurant group in Seattle and am still thrilled for every single paid vacation day and my employer-subsidized health care. We travel and eat out and throw parties. We’ve made friends. We spend time with our daughter playing games, watching TV, and going on walks. We listen to her about her day when we put her to bed at night. We enjoy our lives. It’s as close to the dream as I can imagine for now, and for me that’s enough.

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