Restaurant Owner Reveals Struggles Amid VAT Cuts and Rising Costs

A small restaurant owner in Wexford has shared the stark financial reality facing hospitality businesses as they grapple with rising costs and VAT reductions. Paul Behan, owner of The Lobster Pot, revealed that for every €100 in sales, he must spend €93 on various expenses, leaving him with minimal profit margins.

Behan’s insights come in the wake of a recent budget announcement that has sparked heated discussions about tax reductions for the hospitality sector. He expressed frustration over the misconceptions surrounding these changes, particularly after receiving a one-star review from a customer who deemed his restaurant overpriced. Ironically, this guest had paid with a voucher and ordered takeaway items but did not contribute to beverage sales.

Behind the Scenes of a Restaurant

Operating a restaurant in 2025 involves immense dedication, with Behan working approximately 70 hours each week. His responsibilities extend beyond cooking and serving; they encompass managing administration, marketing, and customer relations. Despite his previous success as a General Manager in multiple hotels, he has found that owning a restaurant presents unique challenges.

Behan outlined his expenses in detail: 40% goes to the cost of food and beverages, 42% to staff wages, 5% to utilities, and 6% to various overheads, including insurance and repairs. This breakdown illustrates why he has resorted to paying himself minimum wage, not out of choice, but necessity.

The Lobster Pot serves as a community hub, where Behan engages with customers on a personal level. He often donates to local fundraisers and even offers rides home when taxis are unavailable. His role extends beyond that of a business owner to include being a mentor and a source of support for his staff, many of whom are teenagers entering the workforce.

Passion Amid Financial Strain

Despite the long hours and slim profit margins, Behan is driven by a passion for hospitality. He believes in the power of food to create connections, foster memories, and bring joy to people’s lives. “I do it because I love it,” he stated. “Every day, I get to make someone’s experience just a little better.”

While larger corporations may benefit more significantly from VAT reductions, Behan argues that small businesses like his do not see the same advantages. He is concerned that the financial support intended for struggling restaurants may not reach those who need it most.

Behan remains committed to his vision of building a sustainable business that provides local employment opportunities. He is determined to create a lasting impact in his community, teaching young people the value of hard work and dedication.

As he prepares for the future, Behan acknowledges that while he may benefit from VAT reductions in the coming months, the overall financial landscape remains challenging. Rising wage costs, auto-enrolment requirements, and a recent surge in energy prices are set to impact his bottom line.

“The prices won’t be coming down anytime soon,” he remarked, highlighting the ongoing challenges faced by small hospitality businesses. Behan looks forward to welcoming patrons to The Lobster Pot, hoping for a better understanding of the realities of operating a small restaurant in today’s economy.