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Monday, January 24

First Week at the Restaurant

Well, it's getting better. Sales are still way, way lower than I anticipated. We thought Sunday would be busy, and indeed we had an hour (right after church got out) when it was really busy. Unfortunately, the rest of the day was slow. The entire week was slow, but we don't even have our sign up yet, so I'm optimistic that the problem is that folks don't know we are open. Word of mouth should also help, as will repeat traffic.

I think each week should be better. Sales will grow (they can't get much worse!) and we will figure out our labor and food costs. I've cut labor expenses by about 25% this week over last week - we will have to cut more, but I want to do it in an orderly way. We are also figuring out how much to cook.

My business partner and I will not be receiving a salary again until we stop the bleeding. This really hurts, particularly since he is also a tenant in one of my properties and won't be able to pay rent. Still, conserving cash is the right thing to do right now.

Friday, January 21

Recap: Day 4 at the Restaurant

Wednesday (Day 3) was even slower than Tuesday, which is why I did not post. I was depressed. It's funny - we got a lot of compliments about the food Wednesday, but we weren't that busy. We've done a much better job keeping the food hot.

Yesterday (Day 4) was worse. Things just aren't looking good. My business partner told me around 9:30 AM that we were ahead of schedule and I took his word for it. At 11:00 we only had one of the three meats ready for the line. There also was no gravy for the mashed potatoes, no rolls and no peach cobbler. Eventually we recovered but it was too late. And again, the food (once it was ready!) was really good.

Yesterday our sales were dismal. We did $312 all day. Non-management payroll was almost 90% of our sales, and we had to throw out a bunch of food.

My salvation lies with today and Sunday. Usually Friday is a busy day for restaurants, and in the South everyone goes out to eat after church on Sunday. By Monday I will either feel like we have a fighting chance or like there's no hope. We can't stay in business with $312 in daily sales.

Wednesday, January 19

Recap: Day 2 at the Restaurant

Things went much more smoothly in our second day. Our sales were down some ($674 gross, less taxes) but other than that it was a big improvement over Monday.
  • We continued to have problems keeping food hot. I'm going to try reducing the amount we put in each pan to see if less food will stay hot longer. Still, it was not as bad as Monday.
  • We aren't bringing in the sales we expected so our labor costs are too high. On Monday we spent in excess of 60% of revenue on labor, and that doesn't include my salary or my business partner's. To give some perspective, we need non-management labor to be about 20% of sales.
  • On a more positive note, we were ready for lunch on time. Nearly everything was on the steam table by 11:00.
  • I'm really concerned about our food cost. We've had a good bit of waste and we also aren't paying attention to portion sizes yet.
My goal is for us to improve each and every day. I know our customers won't give us too many chances to get things right. I also know we are moving in the right direction. We have to move fast or start looking for more funding.

Tuesday, January 18

Recap: Day 1 at the Restaurant

I guess the positive thing I can say is that yesterday is over! Frankly, things didn't go so well.
  1. We battled problems with the steam tables all day. This meant that at breakfast we had to cook most everything to order, including grits and gravy, which should have been hot and ready to serve. I'm not sure why they wouldn't stay hot but they did not. We will look into this today to see what's going on.
  2. My business partner sliced his finger open, requiring five stitches. This put him out of pocket for quite some time. As our primary cook (and I definitely don't know my way around a kitchen), this hurt us bad.
  3. At 11:00, we had virtually nothing ready for lunch, and a swarm of customers showed up. By noon we had half the food ready to serve, but many people left without eating. We lost around $200 in sales because of this.
  4. As if that weren't bad enough, because we were so far behind in the kitchen, my dishwasher was completely overwhelmed. There were times when we needed something that wasn't clean. We didn't finish washing dishes until 2 1/2 hours after we closed.
  5. My goal was to do $1,000 in sales. We ended up with $724. I'm sure we would have reached our goal if we would have been prepared.
I'm usually a very positive person, but yesterday was a trying day. Fortunately we had some very strong employees who took the initiative, and for this I am proud. We lost a lot of money on our first day, so we'll have to get things turned around quickly or come up with additional funding.

Wish me luck! I know we will pull through this. I refuse to fail.

Monday, January 17

Today's the Big Day

At the same time this post goes live (I'm writing this the night before), I am opening the doors to my new restaurant for the very first time. Sure, I'm a bundle of nerves, but I'm also ready to see whether we can pull this off.

My goal for today is to do $1,000 in sales. Our sign isn't up yet because there's been bad weather, so I imagine sales will be hurt by this. I'll be keeping a watchful eye on how many customers are in the restaurant. I'm also worried about our employees. Have we hired enough? Have we hired too many? Will they pull their weight or are they just looking for a quick paycheck?

Our bank account is almost empty. Everything seemed to cost more than we had planned, particularly pots and pans and other kitchen utensils. We spent about $7,000 on those things alone.

Unless I just crash tonight, I'll post an update on how we did on our first day. More to come.

Friday, January 14

Restaurant Opens Monday

I know I've been quiet lately. That's because I've been at the restaurant so much. This week we received approval from both the health inspector and the city inspector. I now have all the licenses required to open. We have three main suppliers (Coca Cola, Sysco and Red Diamond) and have received our first deliveries now. It's pretty cool to see our shelves full of product ready to sale. Our plan all along was to open on January 17th, but we had no idea whether we'd make it or not. I guess it is good to have a goal.

We are nearly out of money - everything has cost more than we expected, especially cleaning supplies. We've spent thousands just on getting the restaurant cleaned up.

I'll be sure to post an update after our first day. My goal is to have weekly sales of $9,000. We can break even at half that, but it would be really tough and my salary would be minimal. I think we could do twice that, maybe even close to $20,000, if we work really hard for the next couple of years. I have no problem working 80+ hours a week when I'm working for myself.

Stay tuned!

Monday, January 10

Where a Frugal Miser is Investing Right Now

My investment strategy involves buying stocks when I think they are cheap and holding onto them. I have too much going on in my life to constantly monitor my investments, plus I minimize my trading costs by not being too active in the markets.

In 2010 I beat the S&P 500 by a very healthy margin. While the S&P was up about 13% in 2010, my Roth IRA increased by 23% and my Rollover IRA was up 38%.

In my Rollover IRA (this used to be my 401(K) until I lost my job), I sold shares in O'Charley's back in February for $8.29 per share. They trade lower today. I bought shares of YRC Worldwide in February which are way down. My other stocks did well. In March I purchased two energy companies (WES and AHGP) and in June I bought a movie theatre chain (CKEC).

In my Roth IRA, I sold shares in Otelco (OTT) for $16.84 which I subsequently repurchased for $15.25. I also bought a few shares of SPY (the S&P index fund) at various times. After the oil spill, I picked up shares in Diamond Offshore for $55.23.

In 2011 I probably will be even less active in the markets. I am focused on paying off debt and expect that I will only fund my IRA and not add any money to my regular brokerage account (which has less than $100 in it right now). I already own shares in Dollar General (DG) but am leaning towards purchasing more. There's not much else that excites me right now, but that can easily change if any of the stocks I watch suffers some temporary bad news and falls in price.

Friday, January 7

2010 Spending in Review: Part 2

There are a few categories I will have to improve on if I want to be a true frugal miser. For 2010, I spent more than I should have in the following categories:

  • Alcohol: $362, but that's a lot better than last year when I spent $1,285
  • Medical/Dental: $1,084. Root canals are expensive.
  • Interest: $4,111 - this includes my car note, student loan debt, HELOC and credit card interest. I do not include interest on first mortgages here. On a positive note, this is more than $1,000 less than in 2009.

Thursday, January 6

2010 Spending in Review: Part 1

I love the clarity that using personal finance software provides. I track and categorize every receipt using Quicken. Today I'll review categories that make the miser in me proud. I'll post the areas I need to work on tomorrow.
  • Gas: $1,432 - might be a lot for some people but I spent $2,046 in 2009 and $3,318 in 2008. Even though I drove more than 48,000 miles in 2010, I managed to cut my fuel costs thanks to all the mystery shopping I've done this year.
  • Personal Care: $120 - This line includes any personal hygeine products or services such as toothpaste, shaving cream, hair cuts, etc.
  • Electricity: $500
  • Natural Gas: $484 - hot water, fireplace
  • Water/Sewer: $522 - not a typo...I paid more for water/sewer than any other utility... thanks to ridiculous sewer rates.
  • Gambling: $1,190 - I cut way back on gambling trips in 2010, but in 2009 I won more than $5,000. I probably won't do any gambling in 2011.
  • Vacations: $2,716 - thanks to mystery shopping hotels, I was able to travel extensively. We took a 5 day cruise (not a shop), 4 night trip to Miami, working vacation to Las Vegas, short visit to New Orleans, and multiple trips to Atlanta.

Wednesday, January 5

My Frugal Miser - 2011 Goals

I have huge plans for 2011.

I am thrilled to be opening a restaurant in January. I think we have a solid chance of being successful, which means my income will be more predictable. It means a lot of things will be more predictable since I'll be working a routine schedule every day. While I didn't do so bad in 2010, there is so much more potential in 2011. Here's what I will accomplish in 2011.

My 2011 Goals
  1. Lose weight. At least 12 pounds, but ideally 24. I realize my 2010 goal was too much and I was discouraged. I need to lose a lot of weight, but surely I can do one pound a month.
  2. Increase my net worth by $50,000.
  3. Reduce utilities expense by 10%. In 2010 I spent $2,703 on electricity, natural gas, water/sewer, Internet and phone. My goal is to reduce this to $2,433 in 2011, or spend on average $200 per month.
  4. Cut credit card/car loan debt to $8,000. It was $44,979.53 at the end of 2010.
  5. Pay off car loan by 4/30/11.
  6. Manage each line item of the restaurant's financials to within 1% of budget. There's too much for me to list here, but basically I have set a budget for labor, food cost and other variables. Obviously it doesn't make sense to set a revenue goal this year, but I can keep my controllable costs within line. So, if my budget for total labor is 30% of revenues, my goal is that it doesn't go over 31%.
2011 is poised to be my best yet.