Overrated Small Business: Restaurant

Restaurants are probably the most visible of small businesses

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Restaurants are probably the most visible of small businesses. Everyone has his favorite little local eatery. Running a place of your own seems not just a fun thing to do but one with major potential: The country has countless examples of restaurants that started out as a single location but eventually went regional or even national. But consider this: How many independent restaurants not only fail to expand but don't even become a hit in their neighborhoods and soon vanish?

The answer is most of them. Two out of three restaurants fail in their first three years, according to the Bureau of Labor Statistics.

That failure rate is not much worse than that of other types of start-up businesses. But in the minds of people who are passionate about food, the image of running a restaurant can seem more inviting than other types of businesses, when in fact it is just as difficult and just as likely to disappoint.

"People think, 'I love to cook, and I love people—that means I have to be in the restaurant industry,'" says Jim Blasingame, host of the Small Business Advocate radio show. "But cooking is not the same thing as running a restaurant."

small business
food and drink