Hungry For More
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Unless you've been living under a rock, you may have noticed Americans love to eat out. If you smell opportunity every time you pass a restaurant, consider a business in the restaurant aftermarket industry. Here are three ideas to chew on:
1. Interactive restaurant Web site
Paul Lightfoot, 30, appears to have concocted the perfect blend of technology and his passion for restaurants. In 1998, he and co-founder Bob Thomas, 30, came up with the idea for foodline.com as a way to leverage the Internet to make the interaction between restaurants and their customers more efficient. To the consumer, foodline.com is an online restaurant guide where you can make reservations, but it also provides technology solutions to restaurants by giving them Web-based marketing tools and consumer data.
Headquartered in New York City, foodline.com currently serves 23 markets, using partnerships with companies such as CitySearch.com and Zagat.com. "I didn't set out to do something small," Lightfoot says. The company started off with an investment of $250,000 raised from personal savings, as well as family and friends. Subsequent angel and institutional investors have put millions of dollars into the company. "We're the kind of company that has to spend a lot to grow," Lightfoot says.
2. Guide to affordable restaurants
Make it easy for people on a budget to find a good meal and you'll tap a ready and willing market. Marc Kravitz, 31, formed Spirit of '76 Publishing in 1999 to produce $18 and Under: The Guide to Reasonable Dining and Entertainment in Philadelphia. "A lot of guides give descriptions that are basically paid advertising," Kravitz says. "My book consists of objective reviews."
The Philadelphia guide, updated annually, fits in a pocket, retails for $9.95 and is sold in local bookstores and on the Internet. Kravitz also markets versions with customized covers to companies as alternatives to traditional giveaways or gift premiums. With about $15,000 in start-up capital, Kravitz says he broke even his first year and expects to turn a profit in 2000. He's considering his expansion options, which include the possibility of taking $18 and Under to other cities.
3. Internet restaurant guides
Start-up entrepreneurs will probably have to do these guides locally. Anne Karle-Zenith of Brooklyn decided to create a local restaurant guide on the Internet. Karle-Zenith, 35, and her husband Lenny Zenith, 39, took $10,000 of savings and launched tasteofbrooklyn.com last October. Karle-Zenith doesn't consider the large online and print dining guides direct competition, because her site focuses exclusively on Brooklyn and its various neighborhoods and is more comprehensive. She admits, however, that "it's difficult to make money from advertising on a content-driven site. You have to have something that goes along with your site that has the potential to generate revenue." She's currently working on a plan to turn tasteofbrooklyn.com into a marketplace guide, complete with personal Web pages for local businesses.
These businesses are only the first course in a wide-open market. So who wants to be a restaurateur?