Looking to Start a Sushi Restaurant?

[Jin86]

Hey guys,

My uncle and I are looking to start a sushi restaurant in central Texas. My uncle has been a sushi chef for the past 20 years, and has spent the bulk of his trade working in Las Vegas. He has about $50,000 from mainly his savings and a loan from a friend. Basically, I need to come up with another $50,000 to help kick-start this business and getting this kind of loan is extremely difficult. I'm currently in graduate school with accumulated debt and my credit score is around 690. My only form of collateral is my 2013 Toyota Camry SE (have only paid off about half) and I'm pretty sure that isn't enough. Do you guys have any tips on how I can acquire the funds? My uncle is an incredible chef and his all-you-can-eat sushi roll theme (borrowed from vegas) at an affordable price could be an extremely lucrative business.

[Harold Mansfield]

No offense to you, but as a debt saddled student with no credit and no assets you don't have the collateral or the credit to do anything. You're uncle will probably have to look for other investors. Having been part of the opening staff of many, many bars and restaurants in Vegas, Mi, and FL...$100k isn't a lot of money. Especially if you plan on having a bar. I've spent $100k on my first liquor order.

He needs someone who can carry the burden of unexpected expenses as well.

[David Hunter]

No idea about funds, but I love-Love-LOVE sushi!!!

There are only two all-you-can-eat-sushi place I know of around me (they're about 35 minutes apart... so really no competition). They are both buffet style.

Now, when I go to Virginia Beach, there's a couple all-you-can-eat sushi places, but they are sit down and you order from the menu, but you can order as much as you like for a set price.

Which style are you two thinking, buffet or order from the menu?

[Jin86]

No offense to you, but as a debt saddled student with no credit and no assets you don't have the collateral or the credit to do anything. You're uncle will probably have to look for other investors. Having been part of the opening staff of many, many bars and restaurants in Vegas, Mi, and FL...$100k isn't a lot of money. Especially if you plan on having a bar. I've spent $100k on my first liquor order.

He needs someone who can carry the burden of unexpected expenses as well.

You're probably right, my uncle may need to look for other investors. He even admitted that $100,000 would be on the lower end of starting up a sushi restaurant. Fortunately, the rent lease in Round Rock is far more manageable than anything he had to deal with in Las Vegas. Thing is, I have about $10,000 saved up, so I was wondering if a strong business plan would be enough to secure around $40,000 from small banks or even working through SBA. My uncle plans on having a bar in the future once the restaurant begins to make profit.


No idea about funds, but I love-Love-LOVE sushi!!!

There are only two all-you-can-eat-sushi place I know of around me (they're about 35 minutes apart... so really no competition). They are both buffet style.

Now, when I go to Virginia Beach, there's a couple all-you-can-eat sushi places, but they are sit down and you order from the menu, but you can order as much as you like for a set price.

Which style are you two thinking, buffet or order from the menu?

Order from menu. For around $25-$28, customers can order as many sushi rolls as they please. This only applies to rolls and not sashimi.

[Harold Mansfield]

You're probably right, my uncle may need to look for other investors. He even admitted that $100,000 would be on the lower end of starting up a sushi restaurant. Fortunately, the rent lease in Round Rock is far more manageable than anything he had to deal with in Las Vegas. Thing is, I have about $10,000 saved up, so I was wondering if a strong business plan would be enough to secure around $40,000 from small banks or even working through SBA. My uncle plans on having a bar in the future once the restaurant begins to make profit.

Ha, yeah. Vegas rent on commercial properties like bars and restaurants is out of control. I would hope everywhere else in the country is a little more sane.

As for your other question, maybe. Depends on your relationship with that bank. If you have a mortgage through them and are on good standing they may work with you on something.
But still, jumping through hoops for what is probably not enough money is pretty risky if everything doesn't go exactly right. And in restaurants, especially openings, NOTHING goes exactly right. EVER. I'm sure he knows this.

However, you said your uncle has 20 years experience AND Vegas experience. I'd be willing to bet that he can find a restauranteur or another kind of investor who would invest in helping him start his own restaurant if he had a solid game plan to show them. A 20 year Vegas Sushi Chef is a pretty strong resume'. Depending on where he worked, who he worked with, or under...it may even be stellar and a no brainer for the right investor.

[billbenson]

I'm not sure I like the cheap sushi model. I generally have about a $70 bill for myself in a sushi bar. Granted there is booze and the more expensive sushi's involved, not jut tuna and samon. But the places I go to are always packed and have the more exotic stuff. For simple sushi, I go to the grocery store. JMO as a sushi lover.

[Harold Mansfield]

$25-$28 for rolls isn't bad. That's about what my favorite local joint is, and it's all you can eat too. Yep, sashimi is more and it's not any roll, it's select rolls. I only like tuna, squid and salmon so it works for me.

[billbenson]

Naa, you gotta try Uni (sea urchin eggs). A lot of people don't like it because of the texture. When I was in my 20's I went to the sushi bars with 'the guys'. We used to do the 'dare' thing, so I've had about every sushi under the sun. I learned to like just about all of them. Some of them are an aquired taste, but now I just love them.

[Harold Mansfield]

Can't do it. I've gone through the entire menu over the years and found my favorites which is probably about only 20% of the menu. I'm good with that.
I'll eat some gator, conch, frog legs and a lot of other critters, but I only like certain things on the sushi menu and I know exactly what to stay away from now.

[billbenson]

I really blew it back in my traveling / wine and dine customers career. There are a lot of exotic things I haven't had like Foie gras. I'm a believer that you should try just about everything with an open mind before saying I don't like something. I should have tried a lot of stuff while on an expense account. Sounds like you did that with the sushi menu which is cool.

[Harold Mansfield]

When I was a limo driver we didn't have time to leave the strip for dinner breaks on most nights, so I used to eat sushi at the Luxor at least once week. I'd had sushi before then, but when you eat at a place multiple times a month you start trying new things.

[billbenson]

But back to the OP. There is a sushi bar near me that is a small joint in a small strip mall. They aren't cheap, but are always packed. They have great sushi and frequently have the exotic stuff. They usually run out of the exotic stuff by the end of Saturday.

The OP's business model of the all you can eat is completely different. The all you can eat sushi places here really have a poorer quality of sushi, even the most basic rolls are more rice and vegetables than tuna.

What business model do you think is best?

[Harold Mansfield]

I'm in Vegas, and live in an area called Chinatown. There are at least 3 all you can eat sushi joints just in my neighborhood that are always packed. I defer to the expertise of his uncle. He has 20 years experience as a sushi chef in Vegas and I think he can take that experience and knowledge and do well exactly as he proposes. I wouldn't change a thing.

[billbenson]

Forgot that he was in Vegas. Makes sense in that case. It's going to be regional. Where I live its mostly a hick town. There is an upscale subculture though. The sushi bar that I mentioned fits into that subculture.

[HooktoWin]

Hi Jin86, There are actually quite a few ways to fund your business. I'll list a few here that you can look into.


Fund your business via peer to peer/crowdfunding. Sites like like Lending Club (https://www.lendingclub.com/), Prosper (http://www.prosper.com), or GoFundMe (http://www.gofundme.com) are great places to start.
Presell a product or service now before it's ready. Could be a certain amount of free meals, access to certain benefits or perks, additional bonus offers with partners, etc. Start selling now and create a waiting list.
Find an investor. Angel investors are usually willing to take on smaller amounts, though it's usually in larger amounts than you're looking for. You can use sites like Funding Post (http://www.fundingpost.com/), ACE-Net (http://www.angel-investor-network.com/ACE-Net.html), or the Angel Capital Association (http://www.angelcapitalassociation.org/) to find the Angels you need.
Apply for a PayPal working capital loan (https://www.paypal.com/us/webapps/workingcapital/) once you're up and running. You'll need to be willing to process a certain amount of your transactions using PayPal as your credit card processor but there's no due date or traditional requirements.


Let me know if you need more ideas.


Andrew

[Harold Mansfield]

Forgot that he was in Vegas. Makes sense in that case. It's going to be regional. Where I live its mostly a hick town. There is an upscale subculture though. The sushi bar that I mentioned fits into that subculture.
I have a lot of restaurant, and bar experience and usually chime in on these questions, but a chef is going to trump any of my knowledge. The Chef is the king of the restaurant. He sees all the numbers and is responsible for most of them. He's in charge of basically the cash register. The product that makes the money. He runs the kitchen staff, the menu, in some places the Chef is in charge of front of the house service, works with the bar on what products to order to pair with the menu, has to deal with inspections, food costs and profit margins, and sometimes even the marketing.

There's not a lot of positions that are going to have more knowledge on running a restaurant than someone who is/was a successful chef. Especially with high volume experience in a highly competitive area.

[David Hunter]

Ah, a fancy all-you-can-eat sushi place! Your prices seem to be pretty good compared to the ones I've been to in Virginia Beach (ordered from menu).

My favorite sushi joint in Cleveland is buffet style and charge $7.99/lunch and $11.99/dinner. Don't let the prices fool you, they have tons of selections and the quality is excellent!

[CCAdamson]

I don't advocate jumping into a business while you have debt. Especially if it is a business that you aren't familiar with. Your uncle is a Chef with 20 years experience but how are his soft skills? What will be his responsibilities what would be yours? Who is the host? Who is the bookkeeper? Not every Chef can run a restaurant so if he is the chef and you are the everything else are you prepared and experienced to be that?

You could sell that car and come up with some money that way!

[Jin86]

I'm starting to have some second thoughts about this business venture with my uncle due to my current circumstances. My sister, who has managerial experience at a corporate level, is willing to help out and suggested taking out a personal loan from our respective banks. If this doesn't work out, then we'll try to find some investors to help out my uncle. My uncle wants me (and/or my sister) to handle the managerial/business aspect. My sister has friends who are CPA and realtors that are willing to help out. He would handle the kitchen, pricing, inventory, and the creative input to help launch a successful business. There is no all you can eat sushi establishment in our area, so my uncle is extremely confident in making a killing with his high-quality food at a reasonable price.

With that said, if I can't come up with the funds within the next two months, I'm just gonna pull out and help him find some investors to start his business. Also, I love my Camry and I don't really feel like selling it LOL.

[LesslieStrong]

Just a question, would be smart to start off as a outsourcing/catering company? You could deliver sushi to restaurants and buffets and this way start off with minimal investment. If your uncle is that good, he will get many orders easy!

[Harold Mansfield]

Just a question, would be smart to start off as a outsourcing/catering company? You could deliver sushi to restaurants and buffets and this way start off with minimal investment. If your uncle is that good, he will get many orders easy!
Sushi is a very perishable food. Catering it without a kitchen infrastructure is not only expensive but risky. Why shoot for part time money when you can open a restaurant and do both?

[billbenson]

Sushi is a very perishable food. Catering it without a kitchen infrastructure is not only expensive but risky. Why shoot for part time money when you can open a restaurant and do both?

Not only that. Sushi requires a particular environment. Its part of the experience. Remove that and you have supermarket sushi.