80% of restaurants fail in 5 years
Dave Ramsey cited that 80% of restaurants are gone within 5 years, while counseling a caller who took a HELOC and spent $183K in savings to open a coffee shop.
Where this was said
Caller: Denise's Coffee Shop — A HELOC, $183K in Savings, and a Warning
At 1:57:00 · chapter starts 1:46:50
Denise has been a Ramsey devotee for a decade: paid off cars, student loans, credit cards, and has only her mortgage remaining. She and her husband saved meticulously, signed a lease, brought in partners, and began a build-out — then discovered the $183,000 in savings was barely enough to cover the physical construction, let alone equipment and operating capital. They took a $95,000 HELOC and are already looking at additional loans. [1] — Dave Ramsey "After a decade following Ramsey's plan, a couple spent $183,000 in savings and took a $95,000 HELOC to open a coffee shop — and they're sti…" 1:51:20 Dave's response is unsparing: she's already in for nearly $280,000 before serving a single cup of coffee, and 80% of restaurants are gone within five years. He says she's turned a dream into a nightmare, that she should have had a complete pro forma before signing any lease, and that coming back to ask for more money is the equivalent of incompetence he'd fire someone for. Rachel notes that with debt continuing to pile up, the couple could hit half a million dollars before opening day. Dave doesn't tell her to quit — he says it's too late for that — but he expresses genuine sorrow and hopes she can claw something back from the situation.
Coffee Shop Disaster: How a HELOC and a Dream Became a $300K Nightmare
After a decade following Ramsey's plan, a couple spent $183,000 in savings and took a $95,000 HELOC to open a coffee shop — and they're still not open and already looking for more debt. Ramsey is blunt: 80% of restaurants fail in 5 years, and they're on track to be half a million dollars in before day one. The dream is real; the plan is not.
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