The Most Overrated Businesses – Restaurant Is #1

The most overrated business is the restaurant business. Here are some of the most overrated businesses to start according to Kelly Spors and Kevin Salwen from the Yahoo Small Businesses page:

  1. Restaurant
  2. Direct Sales From Home
  3. On-line Retail
  4. High-End Retail
  5. Independent Consulting
  6. Franchise Ownership
  7. Traffic-Driven Websites i.e. Financial Samurai, but also Facebook!

Millions have lost their jobs since this recession began, and the stock market doesn't care about you. The most overrated business is #1, the restaurant business.

If you're out of a job, and are living off of unemployment and savings, whatever you do, don't start a restaurant, spa or some other ridiculous high start-up cost venture. Please conserve every dollar you have and hold on until the pandemic is over.

Hang On For Dear Life

The stock market over-corrected on the downside, and looks to now be overshooting on the upside. The same thing happens with employment, and now firms will have to scramble to rehire talent post pandemic, given this “V-shaped” recovery we are experiencing.

It's clear to me after walking around my neighborhood's main strip that restaurants are the most common failure, largely because they're in public view.  

If you fail as a independent consultant or direct sales agent at home, who knows?  But also, who cares?  It's not like you just torpedoed your entire life savings because nobody wants to pay consulting advice to you!

Why can't every restaurant serve great food, with excellent service, at a reasonable price is beyond me.  We all know food margins are high, but it takes steady patronage and reasonable rents for restaurants to succeed.

The most overrated business is the restaurant business. It is an ego business.

Restaurant Reviews

As a food fanatic, and a person who wants to be surrounded by the best restaurants, I'm starting a new tab called “Restaurant Reviews” to help promote new stars and maybe get a free appetizer.  

I figure if I have a Peter Luger's Steakhouse, Nobu, Gordon Ramsey, In-N-Out Burger, Ding Tai Fung Dim Sum, Le Bernardin, Naan N Curry, and La Pergola all within a 10 mile radius, life can't get much better.   Here's a fantastic post I found highlighting how to start a restaurant. After reading this, I hope you will be discouraged and not take the risk!

However, if there are any courageous restaurateurs out there in San Francisco, New York, or Los Angeles who believe in quality, service, and need a voice, drop us an e-mail at

For the consumer, we have a great proposition for you.  You know how often times Zagat or Yelp rates some restaurant one way, and you end up thinking “what the heck are these guys thinking?”  We don't want you to spend a ridiculous amount of money for an event you don't enjoy.  

Why not let the Financial Samurai's know what restaurant you are thinking about, and let us be your private tasters first?  We'll go on a mission, and report publicly, in a non-biased manner what we thought.  Thumbs up you go and spend those big bucks on that restaurant.  Thumbs down, you save your money and go to In-N-Out burger for $3 bucks a person!

We're qualified because we are foodies, and in our 30 years of combined work experience, we've wined and dined clients at least once a week.  Furthermore, it's not just about expensive restaurants.  We enjoy value too, as evidenced by our favorite burger joint.  Let us know!  San Francisco is where we'll start.

The Best Business To Start Today

I agree with the above list completely, except for the 7th option.  There are practically zero barriers to entry starting a “traffic-driven” website.  Competition is fierce, with over 70,000 new blogs being started a day, but that just goes to prove my point.  Anybody can do it!

What people don't know, is that RB and I have travelled 12 years into the future, and see Financial Samurai as one of the most popular personal finance sites in America!  

We're going to have a stable of writers, and edit from anywhere in the world. We believe in ourselves and our venture, do you believe in yourself?

“Do what you love, and you'll never work a day in your life!”

My suggestion is for everybody to start your own website and be their own boss. Leverage technology to be untethered from a cubicle, forever!

I'm editing this post 12 into the future in 2021. My call in 2009 was spot on. Starting an online business is the best business in the world. The most overrated business is the restaurant business. You must start a business that can't be shut down for unforeseen reasons, like during a pandemic!

Pro Blogging Income Statement - most overrated business is restaurants
You can start your site for next to nothing and potentially make a lot of extra income. This is a real example.


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Planning for retirement when paying for private grade school
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Related: The 10 Reasons To Start An Online Business Today

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6 thoughts on “The Most Overrated Businesses – Restaurant Is #1”

  1. Resort at Squaw Creek

    So many people think owning a restaurant is going to be a piece of cake. It’s a nightmare, and takes more sweat labor than you can ever imagine. Overrated for sure. I see restaurants come and go every year on the same street. The start up and sunk costs are huge!

  2. Everything is hard David. Let me know when you come up with $500,000-$1,000,000 for a McDonald’s franchise. That’ll be great if you can do it. My friend owns 4 Little Caesars up in Canada. Cost him about $250,000 each. He loves it and does well.

    David, you never told me what your relation is with Miel and James at DINKS. Are you on their payroll, or a relative? An uber fan? Because I don’t see any posts from you. I think their $600/month income is great. Better than a poke in the eye.


  3. I pretty much disagree with this. The list reads:

    Direct Sales From Home
    On-line Retail
    High-End Retail
    Independent Consulting
    Franchise Ownership
    Traffic-Driven Websites i.e. Financial Samurai, but also Facebook!

    Yes, restaurants are tough, but if that is your passion I’d rather so you go for it instead of seeing you mope around when you are 80 about what you wanted to do but didn’t do.

    Consumer-direct is not overrated. It’s just tough. You need to be the right person – outgoing, driven, and unaffected by naysayers. I know lots of ppl who have been very succesful in this (both part-time and full-time). The most succesful has made over $3 million and is only in late forties. I would go into detail but a whole blog could be written about this.

    Franchise ownership is a pretty solid biz (if you get the right one). I want to own a few Mcdonalds and little ceasers later on in life. I rarely see them fail if they are in the right location.

    What they mean about traffic-driven websites is that it’s HARD. It’s very tough to get a site off the ground. Blogging takes hard, hard work. But I know at the DINKS site they have been making a solid income on the side. They often publish traffic and profits – just search in the search box.

  4. Good point Rachel. I didn’t realize how important management was until I saw that show. Why oh why can’t every single restaurant just be the affordable bomb. Guess it’s because of the management. If your food doesn’t taste good, you know it doesn’t taste that good to a pro chef either!

    Restaurant food prices seem to be spiraling out of control from consumers. Another good topic to discuss. Spending any more than $30/person seems extravagant, unless it’s a special occassion.


  5. Susan Kishner

    Do you do blogroll exchanging? If you want to exchange links let me know.

    Email me back if you’re interested.

  6. Agree restaurants are tough to launch and stay profitable. Definitely takes strong management and a strong team of chefs and staff all around. If you’ve ever watched Kitchen Nightmares you can see how one weak link in the chain can send things spiraling downwards.

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