Selling My Property to Start Restaurant

N

Noball

Hi, I only have one property, a 2 bdr apartment. My situation is quite dim and I would appreciate some understanding and if possible some advice from those with knowledge.

I have been running my own web based business for several years but recently I lost most of my income sources and I had to sign up as unemployed as I could not support myself anymore.

I then tried going to work again, first time for many years when I was sacked when I worked in a young trendy web design company several years ago. I never fitted in as I only knew older technologies and the team were all young guys and I was told I'm too slow and did not know the newer stuff.

So I then decided to work on my own online business, I did well but things changed and now there is very little income.

I'm now also getting a lo older, over 50 and I have no other skills. My computer skills are seen as old hat and I can't complete with all the immigrants and young guys.

I used to be a chef years ago so I decided to have a go at getting a chef job. Well that did not turn out well. I had to compete against young Chinese students who were happy to work for a fraction of the min wage. All they wanted was someone to work super fast and that could fit in with the other Asian kitchen staff. After 2 jobs and trials I was told I was too old and did not fit in.

So now back to the drawing board...

My only hope now is to sell my property. I think I could come out with around 100k if I sold it and paid the mortgage and selling fees.

Of course I do not want to sell my only property but I don't have many other options to make a living. My property is starting to also be positive and I'm slowly paying the mortgage off over the years with lower interest rates etc. It gets great rent and it's in a growing city area.

I'm thinking I could use the money to invest and start up a business I can work in and run. As I had chef experience and I love cooking etc then I think it would be nice to open a restaurant.

yes I have heard all the stories about how hard it is in the restaurant business etc and I will be making a good business plan and doing things carefully.

Going back to the property. I know it would be better to not sell it and use the equity to finance a business but I doubt I could get equity since I have no income to please the banks and that is why I can only think of selling it.

I have training in business management, I have studied for over a year so that should help. I have a fair bit of experience in working in restaurants. I would spend time making a solid business plan and researching.

I do love property investing and I would like to own several properties in the future. I only see this as a temporary solution to get on my feet, get some income coming in and build up my finances then later after 2 years I could buy another property and go from there.

What are your thoughts, what you do if you were in my situation?
 
Do you own a house that you live in, because it sounds like you rent out the "only home I own".

I would try to get a job, any job that is not a chef position or in IT. My youngest has just started working in a factory for the holiday. He is on just short of $18 an hour but is unskilled, and enjoying the work.

No way would I sell an income producing house to start a business, especially such a cut-throat and risky one.
 
wylie said:
Do you own a house that you live in, because it sounds like you rent out the "only home I own".
.
Click to expand...

Hi wylie, I only have that apartment and it is letted out to tenants. I rent a cheaper place for myself. My girlfriend lives overseas and I only live here alone as I can't afford to live there currently with no income and she has no visa to live here. She study's in the hospitality industry and we do have a long term goal to own our own restaurant together anyway.

I have tried several jobs now but it's disheartening and I don't want to keep putting myself through the process again.

The house is only bringing in a small amount after costs like strata, mortgage interest, rates etc, probably only around $20 a week but rising.
 
In NSW (for example), only four out of ten businesses in the food services industry are still operating 4 years after opening.

Being a chef and running a successful business are two different skill sets and unless you have experience in both, or are starting the business with someone who has had experience in both areas, it will be very, very tough.
 
A failed business. Sacked from three jobs and not hired after trials. Sorry, doesn't sound like opening your own restaurant is a good idea. Sounds like a sure way to lose everything. Take Wylie's advice.
 
Noball said:
The house is only bringing in a small amount after costs like strata, mortgage interest, rates etc, probably only around $20 a week but rising.
Click to expand...

That is $20 and rising that you will lose if you sell, and you risk losing the proceeds too if the business fails.

You have an asset now that actually puts money in your pocket. I would find a job, any job and hold onto your asset. It doesn't mean you have given in or given up. I think it means you are being sensible.
 
Can you retrain in an IT skill? How are you with learning new technologies? You surely have a lot of life skills that potential employees would value. Maybe something more customer facing where you age and life skills are a real asset?

Have to agree with the others, now is not the time for you to venture into a new business and roll the dice. Attend any free seminars you can about job hunting, skills updating etc so you can gain some more confidence.
 
Starting a new business sounds like a great idea.

Selling your flat sounds like an awful idea.

Why dont you start a business part time? baking stuff for local cafes, direct sales of frozen meals for time poor people, chai and biscuits at train stations in the morning, or maybe a coffee cart. Foodie vans are all the rage these days, taco's sliders street food etc.

If you cant find an angle without a restaurant, why do you think you can find one when you have rent and staff to pay?

Good luck.
 
tobe said:
Starting a new business sounds like a great idea.

Selling your flat sounds like an awful idea.

Why dont you start a business part time? baking stuff for local cafes, direct sales of frozen meals for time poor people, chai and biscuits at train stations in the morning, or maybe a coffee cart. Foodie vans are all the rage these days, taco's sliders street food etc.

If you cant find an angle without a restaurant, why do you think you can find one when you have rent and staff to pay?

Good luck.
Click to expand...

Fantastic post, and some great ideas to pursue.
 
In a past life I was a chef too (about 12 years ago I started my finance career in mortgage broking). Its a tough gig.
 
Sounds like you want to buy yourself a job...

Not a good deal as jobs are generally free, no capital investment required and much less responsibility together with favourable conditions.
 
Have you weighed up the costs of selling? Agent's fees, cgt (if applicable), solicitor, loss of the $20/wk, paying out the mortgage (if any), paying off credit card debt etc.

How much are you going to be left? Will that affect your access to benefits?

Starting up a business is risky, do you/will you have the capital to establish a restaurant ie. fitout/commercial kitchen, seating, decor; rental bond, bank guarantee, rent in advance, insurance etc?

Have you any experience with the preparation of a business plan for the venture? SWOT analysis? Preferred location? Budget?

Have you investigated your options at TAFE/elsewhere for refreshing your skills either in hospitality or IT?
 
It's great to be able to have your own roof over your head when you're older.
How many more years before you pay off the mortgage?
Can you start a catering business from home, specialising in one or more lines of food? Or specialising in office functions or organic food or weekly meals for people who work but have special dietary restrictions that they can just freeze and take out when they need daily (like tobe suggested)?

I know someone who does a catering business from home who specializes in gluten free cakes (almond meal), vegetarian meals, curries etc. She's just about to embark on fulfilling her orders for gluten free Christmas cakes.
 
Noball said:
I have been running my own web based business for several years but recently I lost most of my income sources and I had to sign up as unemployed as I could not support myself anymore.
Click to expand...

Can I ask what happened here?
Any chance you could revitalise or start new online businesses, as it seems to be what you are experienced at.
Having done it for several years shows you are capable, just need the right products.
 
Noball, running a restaurant/eatery is a 24/7 job. You are now in your 50s and you couldn't keep up with the young turks before, what makes you think you have the energy to do it now? Don't sell your property. Get a job--regular income--and continue to plod along. In your spare time start a small business. Take it from there. Practise your business skills by going into the baby pool first--don't jump in the deep end because you may lose everything.
 
There's been a lot of negative posts here - me included.

Rather than risk it all in a restaurant can you learn from you mistakes? Can you run another web based business? Far less capital required than a restaurant.
 
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