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Ever thought about opening your own business (resturaunt in this case)?

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As usual, not sure of the validity of all this, but it's been published in various outlets.

For anyone who has kicked the idea around of starting a business, this probably won't come as a complete surprise. This also caught my eye because we had a quite similar circumstance here in the town I live. A well known local (other town) restaurant bought an old building near the downtown to open one here. It was highly advertised by our city as another "job creation" feather in their hat. Then nothing...for a long time.

I happened to be in the neighboring town, and at their place there, so I did some snooping (amazing what you can find out outside with the employees while they take a smoke break). What they told me was not surprising.

We are not going to open in your town. We got hosed. The did all the homework and spent the money to buy the building - then the rules changed - the upgrades to meet code were way to much, and way more than originally promised. We are now stuck with a building we can't do anything with - and we are not happy.

So it sits; empty.

Of Two Minds - Our Government, Destroyer of Jobs

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I have a client who bought a building in northern Michigan for his son who planned to turn it into a retail business. They didn't do their homework as well as they should have but that doesn't account for half of the costs they are facing to turn around a vacant, eyesore. And I also noticed the WSJ weekend edition had a couple of related opinions (new web rules and what the banking regulators are doing).

Businesses will not pay any price to enter a market, nor can they absorb all of the government imposed costs of doing without modifying their operation. So even if one agrees with all of the efforts of the government, the should understand the net effect.

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The typical, "I'm a great home cook. I should open my own place." No, no you shouldn't.

Keep in mind that all of this was taking time. In point of fact, from the time I signed the lease in late December, until just this past week, I was doing nothing but getting my paperwork ready and trying to comply with government mandates. Essentially, I spent 7 months trying to not only figure out what I needed to do, while I was paying rent and utilities, but I also spent many hours trying to figure out the complexities of what the state required.

Well, you're an idiot.

Why would you sign a lease if you had no clue what the state required in the first place?

Each place you rent/buy will have different needs to bring it up to code. But this guy didn't know the codes in the first place, so he had no clue how much work was required.

We passed over multiple places because they would take too long to upgrade. But we knew the codes going in and it appears this guy didn't.

I might add more later when I have more time.

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He says he created thousands of jobs and saved consumers millions of dollars, yet he's not smart enough to get his construction costs to bring the space up to code BEFORE he signs a lease?

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Our local community college does inexpensive mini courses for entrepreneurs and small businesses. They go over these things with them, plus stuff like record keeping, taxes, etc. Definitely would save a lot of people a lot of money to take the class while still in the planning stage, and before they sign a lease or purchase equipment.

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I'm with D and Rhino, this guy didn't do his homework. At the same, time the story is an illustration of the startup of a small business (if at all true). Forget for a minute the angle/agenda of this article (and example); how difficult is it for someone to start a small business. Or keep one for that matter.

I'm on board if the general thesis is the incessant pinch on the small business owner. I'm of the opinion that is happening, and I'm not sure it's a good thing.

I don't know how many can make it anymore. But I do live in Cornhole.

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The idea that the very existence of rules is antithetical to Capitalism is specious, ahistorical, and impractical. I'm expecting that if anybody went into a building where the firecodes had been ignored and they suffered serious injury as a result, they would feel betrayed by both the owners of the business and the regulatory agencies that did not do their job. Successful companies surmount the hurdles of doing business in the existing regulatory climate and still make money. If they can't compete in the marketplace and deal with the same rules as everyone else then they should indeed be weeded out.

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The typical, "I'm a great home cook. I should open my own place." No, no you shouldn't.

Well, you're an idiot.

Why would you sign a lease if you had no clue what the state required in the first place?

Each place you rent/buy will have different needs to bring it up to code. But this guy didn't know the codes in the first place, so he had no clue how much work was required.

We passed over multiple places because they would take too long to upgrade. But we knew the codes going in and it appears this guy didn't.

I might add more later when I have more time.

Pretty much thought the same thing as I read the article.

And, as I commented before, I know a couple that own restaurants. They are very successful at running restaurants.

I'd guess both work 80 hours a week running their restaurants. And when I write work, I mean work. They work their collective ***es off. They work as hard at their job as anyone I have personally seen work.

Anyone who thinks running a restaurant would be fun or easy - or - alternatively think they would be a good restaurateur because they are a good cook simply don't know what owning and running a restaurant really entails. And I am saying this as a person who probably only knows 10% of it.

Edited by Mr. Bigglesworth

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I'm with D and Rhino, this guy didn't do his homework. At the same, time the story is an illustration of the startup of a small business (if at all true). Forget for a minute the angle/agenda of this article (and example); how difficult is it for someone to start a small business. Or keep one for that matter.

I'm on board if the general thesis is the incessant pinch on the small business owner. I'm of the opinion that is happening, and I'm not sure it's a good thing.

I don't know how many can make it anymore. But I do live in Cornhole.

Oh, I agree. The authors point of numerous burdensome and picayune rules, codes and regulations are extremely prohibitive and can realistically be viewed as small land mines just waiting to be stepped on to severely hamper or downright injure a business is valid.

In this article though, it appeared to me that this author was looking for someone to blame for his failure, rather than admit he failed in his research which ultimately doomed him from the start.

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Oh, I agree. The authors point of numerous burdensome and picayune rules, codes and regulations are extremely prohibitive and can realistically be viewed as small land mines just waiting to be stepped on to severely hamper or downright injure a business is valid.

In this article though, it appeared to me that this author was looking for someone to blame for his failure, rather than admit he failed in his research which ultimately doomed him from the start.

Agree. The first paragraph is what I'm concerned about.

Nobody said running a business would be easy, no issue there. And don't blame someone else for your own failures, or lack of doing your own DD.

The people who were going to open a place in my town got hosed best I can tell. That's BS, and lays at the feet of our local government lying to them. On the other hand, I have a buddy who owns a restaurant in town. He is always complaining about how he is getting hosed, but at the same time refuses plastic (credit cards). Seems to me he is eliminating "some amount" of potential customers due to his no plastic policy; and maybe a significant amount. I think that's insane in today's world. The only caveat is he isn't a high end place, just a smallish type diner. Still no excuse IMO.

We have a local newsletter that we can subscribe to for free. It is ran by a local businessman who also has a dry cleaner. He is always on top of the local business stuff. What I found interesting is the recent publications of old photographs and post cards of our town. How things have changed. Where did all the businesses go? And therefore the jobs? Our population has dropped from mid 20k to around 17k now. This in the last 10 to 15 years I would guess. There are few jobs here, and even fewer good ones.

From those old pictures you could see many old business who are no longer here. Hardware stores, lumber companies, restaurants (seemed like one of these on every corner), watch and clock repair shops (used to be common), grocery stores (many compared to today), various mom and pop type places. All gone now. Empty or tore down.

What are the reasons? 1) Technology 2) globalization 3) ?

What comes after those? I think it's almost impossible today to open a competitive business venture given the regulations, red tape, start up costs, and the sucky economy. The rules are stacked against you, and that's not necessarily an accident.

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Liquor licensing is one area I would love to see changes. This article highlights a lot of problems.

Significant loss of liquor licenses to Ann Arbor raises concern in neighboring municipalities

A license from the state, which you will probably never get, costs $600. That article talks about two licenses sold for $55,000 and $60,000. We paid an arm and a leg for ours. I know Whole Foods paid $80,000 for their license in 2008.

http://www.mlive.com/news/index.ssf/2008/03/competition_is_stiff_for_liquor_licenses.html

She pointed to Whole Foods Market, which purchased a Class C license for $80,000 a year ago for its planned store on Eisenhower Boulevard, according to the state Liquor Control Commission.

Again, that is a $600 license from the state selling for $80,000.

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Liquor licensing is one area I would love to see changes. This article highlights a lot of problems.

Significant loss of liquor licenses to Ann Arbor raises concern in neighboring municipalities

A license from the state, which you will probably never get, costs $600. That article talks about two licenses sold for $55,000 and $60,000. We paid an arm and a leg for ours. I know Whole Foods paid $80,000 for their license in 2008.

http://www.mlive.com/news/index.ssf/2008/03/competition_is_stiff_for_liquor_licenses.html

Again, that is a $600 license from the state selling for $80,000.

I always thought the license fee to the state was minimal, but they only had so many to go around so you had to actually purchase yours from someone who already had it and was getting rid of it. You actually have to pay the state 80k for a license?

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I always thought the license fee to the state was minimal, but they only had so many to go around so you had to actually purchase yours from someone who already had it and was getting rid of it. You actually have to pay the state 80k for a license?

No, you pay the owner of the license.

They are limited by population.

But the state has jumped into the racket as well.

If you are in a business development zone, they have a special license you can purchase from the state for $20,000.

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WRT the article on the various requirements of Nevada, while I don't doubt some the regulations probably are overkill for certain establishments, my guess (and it is purely a guess) is a majority, if not a healthy majority, improve general health and safety in establishments and are objectively a good idea to have in place.

Maybe Del can weigh in on that.

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Liquor licensing is one area I would love to see changes. This article highlights a lot of problems.

Significant loss of liquor licenses to Ann Arbor raises concern in neighboring municipalities

A license from the state, which you will probably never get, costs $600. That article talks about two licenses sold for $55,000 and $60,000. We paid an arm and a leg for ours. I know Whole Foods paid $80,000 for their license in 2008.

http://www.mlive.com/news/index.ssf/2008/03/competition_is_stiff_for_liquor_licenses.html

Again, that is a $600 license from the state selling for $80,000.

Same way around here. For various reasons, many of our places with licenses have shut down, but they still sell for well into 5 digits. Insane.

A guy who was a deputy sheriff, then a county commissioner, retired and bought a bar. The bar was way behind on fines for allowing people to smoke. He had to pay that off as well as the price for the license and business (as I understand it). He then stuck some major money in the place. It is now for sale. Sits on a major thruway, patrolled by a police force starved for revenue, and known for going after the bars. He can't sell it and now is in debt up to his ***. Pretty stupid IMO.

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No, you pay the owner of the license.

They are limited by population.

But the state has jumped into the racket as well.

If you are in a business development zone, they have a special license you can purchase from the state for $20,000.

Pawn shop license in the city of Detroit easily over $100,000. As far as I know, there is one guy willing to sell. He turned down $100,000. The rumor is he wants $150,000.

In the city of Las Vegas they are pushing $600,000 to $700,000

Edited by rhino

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Pawn shop license in the city of Detroit easily over $100,000. As far as I know, there is one guy willing to sell. He turned down $100,000. The rumor is he wants $150,000.

In the city of Las Vegas they are pushing $600,000 to $700,000

That's incredible.

You can actually buy stock in pawn brokers, or what they call "instant cash solution" companies but they don't look very profitable right now. Ticker; EZPW as one example.

EZCORP Inc: NASDAQ:EZPW quotes & news - Google Finance

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WRT the article on the various requirements of Nevada, while I don't doubt some the regulations probably are overkill for certain establishments, my guess (and it is purely a guess) is a majority, if not a healthy majority, improve general health and safety in establishments and are objectively a good idea to have in place.

Maybe Del can weigh in on that.

Well, some of them even save the guy future headaches.

The sink issue, regulations or not, he needs eight.

The gas line. Sure he might not need a larger one now, but what happens in a year when he adds another oven or another appliance that uses gas? Do you want to close down for a week while a new line is installed? If you don't have the proper gas pressure you wont be able to operate all of your burners or you can operate them all, but none of them will boil a pot of water. Remember, this isn't a home kitchen. We aren't boiling a quart of water here, some of our stock pans are 100+ quarts.

Some of the other crap is a bit over the top.

Normal employees don't need a food handler cert.

The manager cert is required by at least one full time manager. But its not an annual thing in Michigan. Your cert is good for five years. And that price seems high. But again, this is a different state so who knows. Nevada might make you take a training course. Michigan recommends you do but doesn't make you. I think our fee was $35 per person for the voucher to take the test online, and then a proctor administers the test. I forgot the exact amount the proctor charged but it was a few hundred dollars I think, but that was for six of us. Both partners, and all four managers.

The menu thing is the same. But that might be determined by your county in Michigan. Not sure its a state level thing or not.

The no farmers market rule seems like overkill to me. In Michigan we can buy from a farmers market as long as its uncut whole fruits/vegetables. We can even buy directly from the farmers as long as it is uncut and whole.

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Pawn shop license in the city of Detroit easily over $100,000. As far as I know, there is one guy willing to sell. He turned down $100,000. The rumor is he wants $150,000.

In the city of Las Vegas they are pushing $600,000 to $700,000

3EJiXnL.jpg

Same with taxi medallions in NYC. Well, until Uber came along.

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Well, some of them even save the guy future headaches.

The sink issue, regulations or not, he needs eight.

The gas line. Sure he might not need a larger one now, but what happens in a year when he adds another oven or another appliance that uses gas? Do you want to close down for a week while a new line is installed? If you don't have the proper gas pressure you wont be able to operate all of your burners or you can operate them all, but none of them will boil a pot of water. Remember, this isn't a home kitchen. We aren't boiling a quart of water here, some of our stock pans are 100+ quarts.

Some of the other crap is a bit over the top.

Normal employees don't need a food handler cert.

The manager cert is required by at least one full time manager. But its not an annual thing in Michigan. Your cert is good for five years. And that price seems high. But again, this is a different state so who knows. Nevada might make you take a training course. Michigan recommends you do but doesn't make you. I think our fee was $35 per person for the voucher to take the test online, and then a proctor administers the test. I forgot the exact amount the proctor charged but it was a few hundred dollars I think, but that was for six of us. Both partners, and all four managers.

The menu thing is the same. But that might be determined by your county in Michigan. Not sure its a state level thing or not.

The no farmers market rule seems like overkill to me. In Michigan we can buy from a farmers market as long as its uncut whole fruits/vegetables. We can even buy directly from the farmers as long as it is uncut and whole.

Thanks

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3EJiXnL.jpg

Same with taxi medallions in NYC. Well, until Uber came along.

I know they serve a purpose and the way the truly desperate people who go in there act is repulsive most times, but I have a STRONG dislike for guys like him. Preying off the poor. I have never had any dealings with pawn shops...luckily I never was that desperate, but I had a friend who was not good with money and would buy things and then pawn them or sell them. It is a downward spiral. You pay 500.00 for a nice watch and need some cash fast:

maxresdefault.jpg

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The best thing Michigan could do to help new businesses, sort of a best bang for its buck situation.

Fix the websites.

All the info is there, but what a mess. Hard to navigate, wrong and outdated info, horrible design, and generally just confusing a lot of the times. Some counties have it set up pretty good, Washtenaw being one. But at the state level its still pretty bad.

A revamp would save business owners a lot of time and money. Plus I think easier to navigate/find info would make it easier on new business owners as well.

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