How to Lose Your Shirt Investing in a Restaurant

Here are some of the mistakes that business owners make when they open a restaurant. Bonus 'don't': Don't do business with friends or family.

A restaurant owner sits in his empty restaurant while he looks over paperwork.
(Image credit: Getty Images)

“Mr. Beaver, I inherited quite a bit of money from my father recently and have been asked by his much younger brother, ‘Ben’ (my uncle), to invest in a restaurant he plans on opening. He ran two restaurants that failed but has assured me, having learned from his mistakes, that he can guarantee this one will be successful, and I will have a 30% return on my investment within a year. He wants $250,000, which is almost all the money I inherited. ‘Cindy,’ my wife, says that Ben is incompetent, and she will divorce me if I give him the money. What do you think, Mr. Beaver? Thanks, ‘Harry.’”

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

To continue reading this article
please register for free

This is different from signing in to your print subscription

Why am I seeing this? Find out more here

H. Dennis Beaver, Esq.
Attorney at Law, Author of "You and the Law"

After attending Loyola University School of Law, H. Dennis Beaver joined California's Kern County District Attorney's Office, where he established a Consumer Fraud section. He is in the general practice of law and writes a syndicated newspaper column, "You and the Law." Through his column he offers readers in need of down-to-earth advice his help free of charge. "I know it sounds corny, but I just love to be able to use my education and experience to help, simply to help. When a reader contacts me, it is a gift."