Before you venture out and buy a restaurant, you should consider finding out the important facts. Restaurants may be the most sought after businesses for sale. You may find yourself in the position of buying a restaurant that is already doing quite well with a solid customer base. However, make sure you know the full story behind the business before signing on the dotted line.
What is The Real Story?
There is a real story behind every attempt to sell a restaurant. The answer can be right on the surface, on the other hand, finding the real reason may take some probing. If the customers stopped coming, it will benefit you to know why. When organizing the plans to buy a restaurant, you need to know if there are any pending legal or financial issues surrounding the need to sell.
Make Sure You Check All the Books
Your plan to buy an existing restaurant business should hopefully contain elements that will make you a tidy profit. If so, put on your detective hat and make it a point to carefully examine recent expenses and sales to ensure the restaurant you have your sights set on is in the black. This means taking the books to your accountant to see if anything looks suspicious on the surface. Are all the payments going where they should? Does the restaurant have a healthy bank account? Are there any hidden expenses that will show up when you least expect it?
Is the Restaurant’s Reputation Sterling?
Restaurants draw clientele base on reputation as much as anything else. A great way to get the inside scoop when buying a restaurant, is to ask the restaurant’s vendors if the business has been paying its bills on time. If your potential vendors are unhappy with payment performance, this should send up the red flag in a hurry. It is also a great idea to spend time in the restaurant you plan to buy as an actual customer. There is no better way to measure customer service and obtain on overall feel than to sit at the table and be served.
Whether the restaurant is one-of-a-kind or an existing restaurant that is part of a business chain, there are principles to consider that will give your venture a better shot at success. A restaurant concept that is well-defined stands a much better chance of long term success—and after buying a restaurant, it is wise to set specific goals from the very beginning that will define and measure your restaurant’s success.
For the adventurous at heart that plan to buy an exiting restaurant business, it is prudent to know that business conditions can change over night, and your success may depend on being able to meet the changing demands and buying habits of the customer. And, you can bet on your customer base changing periodically. “Winning” is essential, and means maintaining success over a long period. Aspects of your business will change over time—it is simply the nature of how things are. Staying on top of trends without veering away from the loyal customers may prove to be a winning combination.
If you want your restaurant to be busy, an appealing concept will be the thing that wins the day. Restaurants that have a broad and well-developed “theme” enable them to form and dominate a market niche. People will frequent a restaurant that has good appeal—and the more familiar you are with the demographics of your potential customers—the greater your chances will be of running a smooth and successful operation. A restaurant with solid appeal makes a person “feel” good about being there, and the word of mouth endorsements that will surely follow can prove to be a great benefit.
Thing in Terms of Expandability
After successfully buying a restaurant, you can never tell what direction your venture will take. If you have a winning business plan, it can be a good platform for securing a lease or going to a money source to obtain funding. Also, a good business plan will help you to develop systems and procedures required to maintain a state of consistency. Who knows, opening that second restaurant might become a viable option! And before long, you may be looking at a chain of restaurants opening across the states.
Fully Examine the Assets
You should have full access to the assets listed for the restaurant business. This means taking a close look at the age of the equipment. How old is the stove, and are any of the rest of the assets outdated? Is the location of the restaurant up to existing building codes? Even the name of a restaurant can be considered an asset. What does the name imply, and is it in step with the customer base you want to attract? How to buy a restaurant and reap the benefits is best realized when you have a comprehensive action plan in place.