Buying a Restaurant Business
Buying a restaurant business does not entail just paying for one just because it is available for sale. There are many things that you should consider before you make a purchasing decision. If you work with a business broker, he can help you weigh the pros and cons. It is important to note that not all that glitters is gold. Here are 5 powerful tips you should consider before buying a restaurant business.
Follow these tips you would be making a smart business move instead of wasting your money on some dud:
1. Location Is The Key
When you want to decide if a restaurant is going to be a success or not, consider the location. You do not want a restaurant stuck in the middle of nowhere, no matter how good the food might be. You should be looking for a place that is accessible and located in a busy area. If you are in a place that people cannot reach you, your restaurant business is doomed. Nobody likes to go through stress just to grab a meal.
2. Why is the Owner Selling?
Do not just whip out your wallet and pay for a restaurant business that is up for sale. You need to find out why the owner is putting up his business for sale. Find out if the business has been appraised. Do your research on restaurants in the area and find out how much they are worth. This will help you decide if you are getting a bargain or if the owner is trying to fleece you off your hard-earned cash. Most buyers are economical with the truth. It is up to you to get to the bottom of the reason for the sale and how much the business is actually worth.
Before you buy a restaurant ensure that the building is in good shape and everything else is in proper working condition. Imagine, paying up to $50,000 in cash and finding out that the air-conditioning is a relic from the 1980’s. The restaurant should be fully functional. If you do not carry out a proper inspection, chances are you would hit by a ton of bills by spend time repairing stuff instead of trying to turn a profit. If there are repairs that need to made, you can negotiate and take it out from the purchase price.
4. Jack of All Trades
If you have no restaurant experience, it is never a good idea to purchase a one-man restaurant where you play cook, waiter, cashier, manager and owner. You might think that you are saving costs. However, this could be a disaster in the making. Avoid buying any restaurant with this type of set up in place. Go for a restaurant where things are well structured, where the owner employs a manager who in turns supervises a team of people who contribute to the successful running of the restaurant.
5. Go For Reputation
Buying a restaurant with a bad reputation is like flushing your money down a toilet. You are hurting yourself and putting yourself in a position that you may never recover from forever. If you want to buy a restaurant, gun for a one that has an enviable track record in service delivery. It should also have a great customer base of faithful people who will continue to patronize the business even though ownership has changed hands.
About The Author
Alam Qureshi is a Certified Business Intermediary (CBI), Certified M&A Professional and Broker of Record at ProClient Brokers Inc., Brokerage. He helps business owners learn how to sell a business so they can get the maximum value for their company. call us 416 364 5550 or CONTACT US to get in touch.
Date modified: 7-27-2019