One of the key strengths that is associated with an oyster bar is that they are very popular eateries especially in coastal regions where oysters are plentiful and can be harvested easily. The startup costs normally associate with a full-scale restaurant are not normally associated with establishing a new oyster bar. Given the limited fare that is offered, most oyster bars can be established for $50,000 to $100,000 depending on the market. Of course, in major metropolitan markets the startup cost may be substantially higher if a very high visibility and high rental cost location is sourced. The gross margins that are generated by the sale of oysters, as well as alcoholic beverages typically ranges anywhere from 60% to 80% of aggregate revenues generated. These businesses have exploded in popularity over the past 10 years, and the supply of oyster bars in any given market typically is less than the current demand. The moderate price for oysters also allows these businesses to remain profitable and cash flow positive in most economic climates.
For weaknesses, oyster bars typically have to serve all their food at their retail location. This is primarily due to the fact that there are special precautions that need to be taken when handling oysters and related products. Given the very fast spoilage of oysters, this presents one of the guest weaknesses as relates to owning and operating this type of business. Usually, oysters have a very short shelf life and must be discarded if they are not in almost immediately. As with any type of eatery, the ongoing expenses on a month-to-month basis are typically very high. Rental expense, utility expenses, advertising, specialty food personnel that understand how to handle oysters, and related expenses all contribute to one of the primary weaknesses of owning and operating a oyster bar. One of the things that is a positive though is that given the complexity of operating one of these businesses – there is usually only a modest amount of competition in any given market.
As it relates to opportunities, oyster bars typically expand simply by establishing new locations. Given that these businesses typically do have a liquor license or similar beer in wine selling license – there is the need to establish additional locations in order to boost revenues. These types of businesses do not typically lend themselves to owning and operating a food truck or providing catering services given the complexity of safe food handling procedures. In some cases, we have seen past clients and operate as an oyster bar business act in a wholesale capacity by providing fresh oysters to local restaurants that want to offer them as specials from time to time. This can be a very good way of offloading excess inventory walled boosting revenues from a wholesale basis. Of course, the revenues that are generated from the sale of oysters on a wholesale basis is substantially less than when they are sold to the general public.
For threats, there’s really not too much it impacts a way that these companies do business. A severe economic recession may have a moderate amount of impact on the company’s profit and loss statement. However, oysters are always in high demand among people have a keen interest in food – and as such, they do remain popular even during times of economic recession. One of the key threats that is generally faced by an oyster bar is that these businesses can face competition not only from identical eateries but also restaurants that offer this type of food as part of their overall cuisine. These restaurants are expected to remain popular in perpetuity given the continued and ongoing demand among people that have an interest in food for high quality and fresh oysters.