Forums: Discussions for entrepreneurs and small business.

Ok let me start off with a little bit about myself...

I am 28

Very self motivated

Goals oriented

Hard worker

Very dependable

Basically I have always wanted to run my own business (or else I wouldn't be here now would I? :D )

I have always enjoyed working in Deli's, and getting to know the "regulars" that stop by every day, or multiple times a day. I have worked in retail since I was 16 years old. I am to the point where I feel that working for "the man" just isn't enough for me. I am tired of being told to do things wrong, or ways that will be less productive. I am very confident in my knowledge of understanding people, their personalities, and what it is they want. I want to feel that sense of accomplishment... where all my blood and sweat that I pour into my store isn't forgotten after a single mess up. Not saying I mess up often, but when you've worked in Retail as long as I have it is far to often that the perception of someone is completely changed with one stupid move.

The main reason I am here is because I am in the very very early stage of looking into starting my own business.

Is it more wise to start my own deli from scratch in this day and age? Is the cost/reward worth it? Or would it be in my best interest to buy a local mom + pop type deli and kinda spruce it up?

Pretty much I will have about $20,000 of my own money to invest into the business. And after some quick research it seems like I will need about $100k > $300k to get it off the ground. What exactly would be the best method to getting the funds to start up or to purchase a Deli? Does anyone happen to have some literature on starting up a Deli?

One good place to start for any type of food-service startup is http://www.RestaurantOwner.com. You should definitely look into the option of purchasing an existing deli (sometimes you can get all or most of the price financed by the owners who are selling). Also, look into leasing a space that is already outfitted for a deli. With so many businesses closing in this downturn, there are furnished, ready-to-go restaurant locations in most towns.

Good Luck!

Molly Donaldson

The first thing you need to do is narrow down your funding needs by writing a formal business plan. You will need a loan and obviously it will be easier to get a loan for $100K than $300K.

It sounds like you have some experience working in a deli type restaurant. That will make all the difference in qualifying for a loan. However, loan offers and SBA reps will probably be looking for management type experience. You will also need strong collateral and excellent credit. Your $20,000 will help. They won't even consider you unless you come to the table with 20% of the startup costs coming from your own pocket. So, the amount you will be contributing will also determine how much you can qualify for.

You would also stand a better chance at buying an established business rather than trying to start from scratch.

Swinter,

Whether to buy or build from scratch largely depends on

1. What is available,  if it meets you're requirements and the total investment needed.

2. The availability of locations that fit your requirements and the total cost (including the time) for this approach.

If  purchasing an existing business you'll probably have to evaluate the trade off between getting some customers and the "compromises" that may be needed due to the existing facility.

For starters, I'd develop a concept (business)  plan which will help you describe your "requirements" for the facility.

If you'd like to discuss the specifics of your situation, send e a PM or contact me directly.

Wow thank you so much for the brilliant replies! This will really help me out a ton.

You must do your research!  I am a deli owner that was started from scratch.  It is not as great as you think it is.  You will be putting in 18 hour days, every day to start...and that may never end.  You will be no different than the other sandwich shop, especially subway if you serve the same meat and philosophy they do.  I serve BoarsHead and it makes a huge difference.  It cuts into the profit margin, but once people eat my food, they never go back to subway.

Being an independent gives you the freedom to create your business how you like, change your menu as you see fit.  You can't do that in a chain.  The benefit to a chain is the built in clients.  Beware of chains as many of them migrated to the business of selling franchises, not food.

If you start from scratch, you better oversee the buildup.  Keep in mind, everyone is out to rip you off.  People don't care about your success, only if they can make a buck right now.  If you fold, they don't care, they got what they wanted and are moving on to the next guy.

You will go over budget.  Something will happen that will push you over budget.  Contractor issue, timing, financing, you name it.

Your biggest expenses are food and labor.  Oh yeah, I almost forgot....taxes!  My deli is small, it can hold 45 people and its break-even point is about $1000/day.  That number comes after trimming labor to the bare minimums and scaling back the amount of meat I put on my sandwiches, but not ripping the customers off.   Look at what you will be paying in taxes...there are many taxes out there that you are probably not aware of.  Over 50 cents of every dollar goes back out in taxes that are due.  The rest covers overhead.  Lets not forget about the economy.  It's really not there, there is no economic recovery right now so you may want to wait it out.  Many many small businesses are on the verge of collapse because people are afraid to spend their money.  They just don't know what is coming and I don't blame them.  We have seen a 75% reduction in sales and after 2 1/2 years, I am forced to close my doors.  You can advertise all over the place, but you can't force anyone to eat your food.

Oh, and back to taxes.  I paid cash to start my business, so when I opened my doors, I didn't owe anyone anything.  Today, I owe over $50,000 in debt because of extra taxes and keeping up with the loss of sales.

You are probably better off becoming a pimp.  The hours are better and so is the money.

Swinter,

Where are you based? My situation is very similar to yours! I am in California...