Do Restaurants Make Money? SMS Pop Down

Many people who have never worked a day in a kitchen or in the service industry think they can just go and open up a restaurant, but it’s not that easy. Just because you can cook a Jamie Oliver recipe for your six friends and match it up with some gorgeous wines doesn’t mean you are going to be a successful restaurateur, just in the same way I won’t be a contender alongside Rory McIlroy next year at the masters despite being able to hit the odd decent golf shot. Despite this sounding obvious, you’d be surprised at how many people delude themselves into thinking they could run a successful and profitable restaurant with little or no experience. Sure how hard could it be?

Sure Restaurants Make Loads Of Money

I remember standing in a queue one day for a soup and sandwich with a good friend. The bill came to 8 Euros for a top quality lunch and he mused that his job was shit and that maybe he should “just start a sandwich bar”. He worked out that it would cost about 3 Euros to make what he had just eaten leaving 5 Euros profit. Multiply that by 100 and he reckoned he’d make 500 Euros a day, 2500 a week or 10,000 a month. Unfortunately the fantasy ended once I pointed out some of the things that he hadn’t factored in. This is by no means all the overheads a café or restaurant would have, but they include…

• Gas
• Electricity (all the big equipment and machinery is expensive to run)
• Lots of chefs and other staff members working behind the scenes to be paid
• Broken glasses, crockery etc
• Rent in the expensive parts of town (as they get the most footfall)
• Rates
• VAT
• Produce that doesn’t get sold
• etc etc etc

The biggest problem that restaurants have in terms of making money is that most are open for lunch and dinner. For most of the week lunch is a disaster for restaurants with many places merely breaking even at best and maybe getting some of their prep done for the evening. It’s been very hard to get people to pay more than a tenner for lunch over the past 7 years because people simply didn’t have the money. Dinner might look packed in restaurants to you as a punter, but the chances are you are eating out on a Friday or Saturday night. People often don’t see the quiet Monday nights where 4 punters show up for an early bird menu and another guy comes in at 9pm for a steak despite the fact that the restaurant still needs a full roster of staff and fridges full of expensive ingredients. It is a seriously tough business and very few people get it right in terms of making money.

SMS Pop Down

I was thinking about all of the above when I sat in SMS Pop Down last week. This is the latest addition to the Super Miss Sue brand on the corner of Drury Street. They’ve had an absolute mare with the electricity in the building, but finally got it working a couple of weeks before Christmas. As the people behind 777, Dillingers and the Butchers Grill, anything they touch usually turns to gold.

What they’ve nailed here is an entirely new model for a restaurant. With the café, chipper and now the pop down they serve food for about 14 hours straight, every day of the week. In quite a small space they’ve created what is effectively 3 different restaurants built around a main kitchen. If somebody had pitched me that idea a year ago I’d have told them that they were absolutely bat shit crazy and that it would never work but these guys are true visionaries. The chipper is outstanding (and they’ve fixed their pricing as it was just too expensive at the start), the café is a delight and the pop down is one of the most iconic dining rooms in the capital.

They are cooking everything on charcoal so every piece of food gives an explosion of flavour in the mouth. The menu is limited to 4 starters and 4 mains most of which are the signature dishes from the other restaurants. As I sat there eating gambas I was tempted to ask them to “throw another shrimp on the barby”, if I closed my eyes and forgot about the cold outside I could have been eating that dish in Melbourne. Next up was a steak which was superb but I was more interested in the baked potato. It’s one of my favourite things in the world to eat and the only place I’ve ever had a decent one is Crackbird. It is the most overlooked way of cooking potatoes and I was delighted that they nailed it here. Fluffy and light with a good crispy skin.

I’m told the place (the official name is Luca) will only be open Thursday, Friday and Saturday which is another smart move and that it will always have a pop up feel to it. What sets the place in a different level is the design though. Customers peer down into the bar area like a strange underground human goldfish bowl. The fonts on the walls would have any designer pissing themselves with excitement. Anybody can design a room well, but it is the unique buzz that sets the room apart. The acoustics of the room, the buzzing open kitchen, the dark mood lighting, seats at the bar and buzzy staff are what make that happen. Being brutally honest I think the place is only 80% ready. You can make a lot of money in December and I imaging why they opened when there’s still some work to go. They’ll add a few more touches and slick it up even more but even at 80% this is still better than 90% of other places. I’d fully expect it to be the place to be seen in 2015.

So Do Restaurants Make Lots Of Money?

For the most part the answer is no. We cover all the new exciting ones, but for every place opening there is usually another closing that very same week. There are many that run decently where a couple of people (say a chef and a front of house person) can make a living out of it, but they have to put their heart and soul into it with very little time off and often end up there on their days off covering people who are out sick. A chef bringing home a few steaks to the family on the sly or a barman pouring doubles for his mates can be the difference between profit and having to close. Despite people paying 20 Euros for a main course, the overheads are huge and never ending. There are places like McDonalds, Eddie Rockets and Wagamama that make money at scale but you obviously need serious backing to get something that big going. The places that make serious cash in Dublin are the likes of here, 777, Crackbird and Bunsen. They are places that put a huge amount of effort into their design, branding, product offering, food and service. Because of that they can charge a nice premium and people will keep coming back and they are full most nights. It isn’t an accident that places like these make money and it all boils down to hard work and a serious amount of experience. Expecting to just open a place and get rich quick is absolutely ludicrous. Having worked on both sides of the stove, the best place to be sitting is at the bar relaxing and not having all the worry. It’s a tough business. If you want to see how the best in town do it check out SMS Pop Down as this will be the place to be seen on 2015.