Advice - Biz School Or Start Biz

[jyl]

Interested in thoughts on some options my daughter is considering.

Background (and its a little complicated): she's mid-20s, an excellent writer and artist (degrees in Journalism and Fine Art). Fluent in French, living in France for the last two years, many local friends there. Starting in high school she worked summers at a city family camp in the Sierras. Became head of kitchen, then head of meal services, then camp manager (run entire camp, 50+ staff, 250+ campers). She's very into cooking, both the high through-put commercial cooking side and the foodie experimental side.

She's discovered, via the camp experience, that she's very good at managing people, so is thinking about going to business school. MBA programs in US and Europe are very expensive - think tuition $75,000/year. She worries she won't get into a top program - tests very well, 4.0 GPA, but maybe not the right work experience.

She has also long thought of starting a restaurant or cafe. Her friends in France love a particular kind of Chinese cuisine she cooks, which basically isn't available there, and want her to start a restaurant. Some of her friends are chefs, others have their own small retail businesses, they are familiar with the city's ins and outs, tastes, what people there want.

So, she's researching rents, estimating costs, putting together a business plan, looking into visa categories, etc.

I don't know if it will pencil out. Hypothetically, let's assume she can start and run this little business and manage to support herself, won't go into debt, live in a way that will be fun "for now" (imagine being in your twenties, living in one of the coolest cities in France, running a little business you started, hanging with your friends, you wouldn't need a lot of possessions or disposable income to be happy) but also assume that in some years she'll be looking for what to do next, maybe writing or art or another business or back to the business school idea, who knows. In other words, kind of back where she is now with added experience and years.

What would you think/say? Done anything like this yourself, regrets, none?

[McLovin]

If she gets into a T7, go.
If not, don’t,

[look 171]

I tell ya, I missed out so much during my 20s. I started my cabinet making business after my first year of college out of my father's garage. Within two years, I rented a shop and had some real responsibilities. I did all sort of handyman type work to build our reputation. Looking back now, financially It was the right thing to do, no loans needed to get through my long 7 years of undergrad and saved enough money to put down 50% to buy my first house at 29. Running a small business consumed all my time, every single day. I took days off when I can but when we got busy, I can only wish my friends a great ski trip while I stayed back to be slave to my business. There are fun times too when I was between projects, I travel the world sometimes taking two months. There's are some great times and some bad running a business. I say go give it a try. That experience is golden only because she will see things from the other side and not from an employee's stand point. Although I missed a lot of hanging out in my mid to late 20s. Given another chance, I do it again without thinking twice.

[PorscheGAL]

This sounds like such a fun option! I wish her all the luck!

I don't know if you have seen the show about Julie Childs' home in France that is now a cooking school? It is on HBOmax. The school is owned by Americans. I wonder if they would be willing to answer some of her questions? For a consulting fee? Might be worth an ask.

La Peetch

[Superman]

I've really appreciated your contributions here, jyl. Here is what I can offer:

I have a graduate degree in business. Never did own a business, except just a business license so I can collect consulting fees. I would have made a LOT more money as an entrepreneur, but I did have a lot of fun in my career and I am not poor.

Something like 90% of new restaurants fail. Everybody and their friends and family want to start a business because we've got this great recipe for schitzel. The amount of work and stress would be hard to overestimate. Tell her to estimate the cost in time and money and then multiply both by three. Higher education would be expensive but then so would starting a restaurant. It would take some time, if ever, to start turning a profit. In the meantime there would be rent, interior construction, equipment, materials (food ingredients) and wages for staff. And unforeseens.

And actually, presence or absence of profitability is not usually the main danger. The bigger danger, often is success. And cash. Business starts. Customers abound. Future looks rosy. Debt is incurred to finance the servicing of an expanding customer base, and the entrepreneur finds there is insufficient cash flow to service the debt and the operating costs. The effort fails, due to growth and cash limitations, even though it is awash in profits.

That's the good news, here is the bad news: Just kidding. Entrepreneurship is by far the best method of retiring when she is fifty. Getting an education and then earning a salary is the "bird in the hand." Entrepreneurship is the "two in the bush." Some restaurants do not fail.

You say she is assembling a plan. She cannot possibly spend too much time and energy on this. It should arguably take her six months, minimum, and likely closer to a year before she will really be able to present a complete plan/strategy and assess her chances of success. As she moves forward, she will want to seek the advice of those who can answer her questions. I cannot stress this enough. She should over-plan.

Another benefit of this is that others will become excited. Sponsors. Business partners. Fans. Resources.

This is an exciting time for her. If she is energetic and engaged, she will feel as though her knowledge doubles each of the next few years. Different options will come into focus. Risk is dangerous, but also exciting. Just like life. Exactly like life.

[Norm K]

If you ever want to be married to a business, start your own restaurant.

_

[recycled sixtie]

Hey Jyl your daughter sounds like she is doing very well. An MBA program seems to be a lot cheaper in Canada than the US. Just a thought. Starting a restaurant is interesting but as mentioned above sounds high risk.
Cheers, Guy.

[911 Rod]

When I started my business I lived off my line of credit for 3 years and spent the next 10 paying it off.

[wdfifteen]

Superman's response is excellent, very balanced, realistic while encouraging.

If I had read it 35 years ago I would have been more realistic about the challenges, but I still would have taken my path, quit my job, and started my business.
It's all about motivation, motivation, motivation. You can do anything if you are motivated to work hard enough at it.

When I quit my job to start my company my supervisor said, "Why quit? Fifteen more years here and you'll be riding the gravy train."
I told him, "I don't want to ride the gravy train, I want to own it."

It worked out for me. Good luck to your daughter. She sounds like she has a bright future no matter what path she takes.

[GH85Carrera]

Assuming she can get all the legal paperwork from the French governments for her to start and run a business, starting a restaurant will be a crazy amount of work. Restaurants only make money when they are open, and busy. 7 days a week, holidays included.

One of our couple friends opened a B&B in Eureka Springs, AR and it was her life long dream. She loved it for the first couple of years. Then she realized she was married to the business. She had to be there all the time. To hire a manager to take of of the place for her to go visit her kids cost her all the profits for the period, so he was making nothing for all the investment.

She was happy to sell it a few years later.

Your daughter sounds amazing. Starting a business like a restaurant in France sounds like something from a movie. Good luck to her whatever she decides. At her age, start the business, give it a go, and sell it when she is tired of it.

[jyl]

So here's a little more I've learned.

Rent for a 50 sq meter (about 500 sq ft) streetfront retail space in her city is about EUR 1600-2400/mo. Her planned operation requires only modest cooking equipment and one front-of-house employee. Little restaurants like that are common in France, sometimes they also rent (?) space in an adjoining public square for outdoor seating.

[jhynesrockmtn]

My oldest daughter and her husband own a long established restaurant. They worked there (he's a chef and quite talented) first, then purchased it 15 years or so ago. She runs the front of the house and overall runs the business. He manages the kitchen.

They've grown to dislike it and are looking forward to selling at some point. They just signed a new 5 year lease. In short, they are married to the place and rarely get time off. COVID did teach them they can run it a bit smaller scale. They went from lunch/dinner 363 days per year to dinner only and now closed Mondays.

The schedule change has been somewhat forced by it being nearly impossible to hire staff. The lunch business makes no sense with people working from home more and offices being empty.

I have no idea what it takes to open and be successful with a restaurant in France. Just providing some perspective on owning a restaurant. My daughter has made decent money over the years but the personal cost has been very high.

Business school sounds like a waste if she doesn't know precisely what the degree will get her. If she is not risking a ton trying this, go for it. She will learn a lot just going through the process.

[gacook]

If it's her passion, go for it. Succeed or fail, she tried something she loved--truly experienced life.

Business school...MBAs are a dime a dozen (I have one). What's the purpose behind needing one from a top-tier school, especially if her primary focus is so small (her own restaurant)?

If she's already entrepreneurial, I don't think she'll get much from an MBA program, personally. I still believe the best way to learn anything is by doing.

[Rot 911]

If she’s only in her mid 20s, she has plenty of time to experiment with life. Maybe the restaurant will be a big success, may be a failure. But she still has plenty of time to change gears and do something else. I am a good example of that. I went into the army when I was 18 and spent 10 years on active duty. And another 14 years in the reserves. 24 years as an 11 bullet stopper. I started college when I was 28. I graduated from law school when I was 35.

In my 20s I think I’d rather be in France risking it, and enjoying life, then in college taking business classes.

And like Guy posted above, MBAs are a dime a dozen. And your daughter doesn’t seem like the type that would enjoy that kind of a career.

[Seahawk]

Originally Posted by jyl

Rent for a 50 sq meter (about 500 sq ft) streetfront retail space in her city is about EUR 1600-2400/mo. Her planned operation requires only modest cooking equipment and one front-of-house employee. Little restaurants like that are common in France, sometimes they also rent (?) space in an adjoining public square for outdoor seating.

First of all, what a pleasure to read your OP. I am sure your daughter will excel in whatever path she decides.

I worked in the restaurant industry in HS and college and then owned a business in college, like a restaurant, service related.

There is a lot, as you not doubt have discovered, of data concerning restaurant business plans that are really excellent guides...no idea if they are applicable to France but I am sure those are available as well.

https://restaurant.eatapp.co/blog/restaurant-business-plan

A few things she need to think about concerning the restaurant (again, while my experience is in the States, I am sure some of the same issues exist in France). I may get a little too specific but my experience has been new restaurateurs make a few common mistakes:

- Lease or rent everything possible to run the restaurant: equipment, plates, utensils, linens, furniture, etc. Minimize fixed debt to start. Get Gucci later.

- Hire a part-time book keeper to help keep the daily income/out flow organized, especially if she is going to be in the back. I worked at a restaurant in SF, small, that had a lady come in a few hours before closing and work the numbers. That was essential to the friend of mine that owned the place.

- She has to be very realistic on staffing requirements. The common mistake is to go light in the beginning and not anticipate all the time sinks that will drive her nuts and potentially impact the business.

- Trust no one. Sorry.

Those are the big four I have seen handicap new starts.

Now, my advice to your daughter: what would I do and why?

The restaurant.

A few reasons:

- Experience and an adventure into something like she is considering, managed well, is the best possible learning environment possible. I was 20 and a part owner of a small white water rafting company. I know there was an event horizon for me - this was not a life-time gig - but I grew exponentially as a person and it helped guide future endeavors.

- Resume. If she succeeds or fails, there is not a top B School on the planet that will not get her journey in a positive light. Frankly, with her under graduate degrees, they will view her efforts in the restaurant business as essential in many ways to accepting her.

- She will regret not at least doing the due diligence. Life is short: She is good at the management of people side, a gift, btw, and more education may be a bit superfluous at this time.

- Connections. Next bullet hits this.

- Her restaurant experience will shape any future educational desires. My daughter went to ASU on scholarship for business. She did well and worked in Scottsdale for years running large events around the Southwest, which she is very good at. She made a lot of connections and was offered a job in NYC.

A year in she realized she had made a mistake, quit, moved and started her own business, which has gone very well. All based on connections - which your daughter will make. Real world ties.

Instead of getting an MBA, my daughter has taken a lot of courses at ASU after she graduated and started working, in specific areas she felt she was lacking in a practical sense.

One of my favorite scenes:



All true, btw. If she decides to go to school later, she will be so far ahead it will seem humorous.

Mt best to her.

[LWJ]

I didn't read all the responses as I have really only one central thought on this.

I have an MBA. It took three years of every second of my free time as I was working full++ time while I attended. I went to Portland State.


1) If I had contributed the time and money towards a business that I put into the MBA, I would have progressed WAAAY further.
2) An MBA is great for some things. My degree from PSU was fine for "training" but a total zero for networking. I only know one person from my MBA coursework today. I know dozens from my undergrad - go ducks!
3) My MBA did seem to impress some people. It also changed the way I think. There is certainly value in the MBA.

My summation is this: With the mojo your daughter has demonstrated, she doesn't need an MBA. UNLESS, she wants to follow a track that needs it - like a Wall Street position or similar.


Post Thought: Management classes are stupid. You either get it or not. Marketing classes are mostly stupid but less than Management. Again, it is either intuitive or not. Accounting classes are great - but I chose to hire my accountants so I can do with out this. Finance classes are great, but I am a sales person and figuring time value of money doesn't happen very often in my life. So, as you can see, I am not that big on the business curricula.

[NYNick]

MBA's are a great education, but it certainly isn't required unless you're entering the Wall Street Finance field. I'm glad I got mine because it broadened my knowledge of how small businesses work/fail.

The restaurant business is difficult. Most people become slaves to their businesses for a variety of reasons, whether it be watching the till, over managing or keeping the quality high. Lots of drug and alcohol issues and many divorces. It can be lucrative, but also difficult to sell unless it's a franchise or you develop a chain. We used to say it would be a great business if it weren't for the customers and employees.

Maybe she should do both. MBA part time while working in the catering industry. I think the best money is probably in high end catering. If she's as good as you say she is, she could develop a wonderful offsite private business with 1/2 of the problems, plus, it would be salable down the line.

And don't forget her childbearing years are looming.

[jyl]

I also think she’s currently light on work experience for most MBA programs.

Some programs really like entrepreneurial applicants or those with unusual backgrounds. My alma mater (Haas) was one - they’d probably dig a multi-lingual artist-writer-cook type who started a French business. But that last part will be helpful. And it now costs $200K to get an MBA from there, which is crazy.

[speeder]

Originally Posted by McLovin

If she gets into a T7, go.
If not, don’t,

Curious what the 7 are at this time? One of my favorite cousins got his MBA from Kellogg, (his undergraduate degree was in art), when he heard that my nephew was at HBS, he said, “nice second rate MBA program.”

FWIW, cousin is a super successful entrepreneur in the only business with a higher failure rate than restaurants…he and best friend from college are furniture designers and started a company, Blu Dot. My nephew was already doing extremely well in the work world but my hunch is that he needs the MBA to reach a certain level in the corporate/finance world he has been working in.

[wilnj]

Not sure if it’s a thing in France or where she is in France but what about a food truck?

It would be a lower cost of entry and allow her to test locations at different times of day.


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