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In the high-risk restaurant business, how do chef-owners actually make a living?

Source images from associated press; globe staff photo illustration/Vladyslav Bashutskyy - Fotolia

One food entrepreneur eats eggs for dinner every Monday night and only has lunch out once every three weeks. Another name chef lived in a South End walk-up where she lined the door with plastic to keep out the cold. The culinary world might seem like a glamorous place to make money and live indulgently — looking at you, Anthony Bourdain — but the reality isn’t always fit for social media.

It’s no secret that opening a restaurant is a risky investment; roughly a quarter fail in the first year alone. But these chefs are also humans with personal lives. They might have investors to reimburse, but they also have families to feed and bills to pay outside the kitchen.


So how do they do it, when the average chef-owner salary in Boston is roughly $80,000, say industry insiders — and when many new chef-owners don’t take a salary at all, despite working 80-hour weeks? And when restaurant rents can climb to $100-plus per square foot in prime locations?

It takes passion, luck, a tolerance for risk — and, most of all, a more modest lifestyle than many might guess.

Take Steve “Nookie” Postal, the gregarious chef-owner at Cambridge’s Commonwealth and the former executive chef for the Red Sox. He’s a big social media presence. He’s visible at local events. He gets plenty of press, and his outgoing personality keeps him in the public eye. You’d be forgiven for thinking that he lived a pretty posh life.

In actuality, he has three children under 10 and a wife who recently quit her job as a social worker to care for their kids full-time. He owns a two-family home in Cambridge, half of which he rents out to pay the mortgage. Aside from that, he lives frugally.

“If I want to go to a movie, it’s $100! I have three children! I haven’t even gone out to dinner recently. I haven’t done anything. I spend literally no money on myself. I work and go home!” he says with a chuckle.


Here it might be helpful to understand how the average chef who owns a restaurant manages to finance it. Unless someone is sitting on a pile of money, he or she relies on a combination of investors, bank loans, even credit cards. Deal structures can vary, but each of these three entities needs to get reimbursed promptly, which is why chefs often don’t take salaries until they fulfill their debts, which can take three years or more.

(About those investors: Most put up the money for pure passion, not because they’re looking to get rich quick. Anyway, chances are, they already are.)

“There are razor-thin margins,” says Postal.

Of course, crowd-funding is another option: Postal raised money for Commonwealth not via trust fund but via Kickstarter, and the last of the funds arrived not after a schmoozy wine dinner but at a child’s 6th birthday party.

“One of the dads said to me, ‘You just sit around in a sweat suit all day. Do you have a job?’” Postal recalls. He explained his situation, and the dad and pals drummed up the shortfall. As is customary in the crowd-funding world, Postal paid back his investors with gifts like private dinners.

Things don’t always work out, of course.

Jeff Fournier ran two of Newton’s top neighborhood restaurants, 51 Lincoln and Waban Kitchen, before filing for bankruptcy last year. He and his wife, Kate, then abandoned city life and relocated with their children to Jackson, N.H., where they reopened the landmark Thompson House Eatery. They also live on the property. The White Mountains are a far cry from Fournier’s faster-paced days working for the likes of Lydia Shire. But at 48, he needed a change in lifestyle, he said via phone while out for a country drive with Kate.


“We were renting two restaurant spaces, paying a mortgage to own a house — and now we cut our monthly overhead between the business and our living expenses by down to almost 30 percent,” he says. “Our occupancy cost between rent and real estate tax was $27,000 per month.”

This cost should be between 6 to 8 percent of revenue, he says, which meant he needed to generate $1.5 million every year.

“Now I feel a lot less pressure,” he says.

So does Jason Bond, 46, who recently sold the Concord outpost of his Cambridge restaurant, Bondir, because it wasn’t making the numbers. It was in business for four years.

“The goal of restaurants, if you ask a consultant, is to make 10 cents on every dollar, and it’s extremely difficult to do that,” Bond says. “Concord never had that level of business. I didn’t take a salary for the last three years except what I needed to pay rent for my apartment. I paid myself to live.”


So he sold it off. Bond is taking some downtime in his garden before returning to the original location full-time at the end of May.

“I’m here cleaning my deck and building some raised beds, that kind of thing, and it’s the first time I’ve done this in three years,” he says, sounding relatively relaxed.

Other chefs opt for stable paychecks at established country clubs, universities, or hotels. Others, like Group M Inc’s Michael Staub — who calls himself “an old cook with an MBA” — become consultants. He once worked at L’Espalier; now he helps aspiring restaurateurs form clear-eyed business plans.

“Many young chefs come to me and say, ‘I don’t need to get paid.’ I say, ‘Do you have a family? Do you have child support in addition to your family? What are your needs?’ There are some truths in the restaurant business that are true regardless of the concept,” he says. “What I’ve often said before is that many people have more dollars than they have sense. Just because you have money doesn’t mean you will succeed.”

And many chefs don’t have money, not right away. As Fournier puts it, “When you look at the scale of what the Boston market will bear, an average sous chef is making — obviously this is a range — not more than 40 to 50 [thousand] and working a ton. A chef de cuisine isn’t making more than 45 to 60 [thousand]. At corporate places, you’ll make 45 to 60 [thousand] as sous chef, but you won’t make 80 to 100 [thousand] unless you own your own place. Your restaurant will need to do a million to 1.7 [million] so you can pay yourself 80 to 100 grand, and you’re working all the time.”


Of course, reserve your pity: These people chose to become chefs, not hedge fund managers, and we’re not even talking about how much line cooks or dishwashers make. But chefs do say that it would be beneficial to get a lesson in finances before taking the restaurant plunge.

“It would be helpful for people to come up with budgeting classes,” says Haley Fortier, who owns downtown wine bar Haley.Henry and lives in Winthrop. “People live paycheck to paycheck. It should be on the table, a bigger topic of conversation,” she says, noting that many of her chef peers have roommates to offset the cost of living in the city.

But even though much of the restaurant world is laid bare thanks to social media and reality TV, any whiff of financial dissonance remains private, especially in an industry still permeated with a sort of work-hard-play-hard bravado. That’s the irony: This is a business built to some degree over hedonism, promotion, and the pure, carefree pleasures of food and drink. But the more you struggle, it seems, the more hard-core you are.

“There’s a sentiment that I pick up on, that because it’s our life’s work and our craft, we should be happy toiling away, working our fingers to the bone,” says one established restaurateur.

But if you do love it, the risk and uncertainty really shouldn’t matter, chefs say.

“If I wasn’t doing what I love, I might as well go become a forest ranger,” says Bond.

Barbara Lynch, who rose from the South Boston housing projects to run posh restaurants like Fort Point’s Menton, where a burger at the bar costs $26, puts it bluntly.

“I grew up with nothing and could live with nothing. I’ve been there,” she says. She recently left her city digs for a hideaway on the water in the Lanesville neighborhood of Gloucester. It’s hardly nothing, but it’s definitely a calmer vista than before.

Same with Fournier, the former Newton chef now living in New Hampshire.

“I say it all the time: Opening a restaurant is a stupid idea. But this is what we do. And now I get to play, have lunch, and go out on my motorcycle on the first ride of the year. I have some quality of life,” he says.


Crunching the numbers

Let’s say you take out a $250,000 bank loan to open a 70-seat restaurant that does $1,000,000 in sales. Here is where that million might go:

$290,000 Purchases of food and beverages

$330,000 Payroll

$72,600 Payroll taxes and employee benefits

$65,000 Direct operating expenses

$40,000 Administrative and general

$35,000 Advertising and marketing

$10,000 Repairs and maintenance

$85,000 Occupancy (rent, taxes, utilities)

$40,000 Debt service (principal and interest)

$32,400 Cash remaining for you and your investors

Kara Baskin can be reached at Follow her on Twitter @kcbaskin.