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A comment on The Thrill of Losing Money by Investing in a Manhattan Restaurant. Parent comment

Re:The Thrill of Losing Money by Investing in a Manhattan Re... by nstj on Saturday September 17, 2016 @03:06PM (#12521891)
Just because that restaurant had a line out the door, doesn't mean that it was a successful business. Often food and beverage "businesses" will be incredibly busy, but not be turning a profit.

Restaurants have horrendously low margins[0] - from 1% - 5%, so even if you're selling hundreds of plates of pasta/burger/lobster it's quite possible that your restaurant is making a loss.

[0]: https://www.sageworks.com/pdf/Data_Release_06102014.pdf

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Re:The Thrill of Losing Money by Investing in a Manhattan Re... by gjolund on Saturday September 17, 2016 @03:32PM (#12522026)
The same is true for many tech companies.
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Re:The Thrill of Losing Money by Investing in a Manhattan Re... by joe_the_user on Saturday September 17, 2016 @04:38PM (#12522344)
Yes but an Internet tech company has the potential to expand its scale without increasing its costs and so may, might be able to turn small amounts of money per customer into profits. A restaurant basically can't - food costs money no matter what. Selling food at below your costs may bring in customers but it will lose you money no matter what your scale.

Edit: (remembering article from years ago) A few, very few restaurants have been successful based on low-prices through economies of scale these are a very exceptional group I believe.

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