Are You Thinking Of Buying A Restaurant?

So you are thinking of buying a restaurant! You have been working in the restaurant business for many years and you want to make your dream come true and open your own restaurant. The newspapers have many ads offering restaurants for sale, how do you decide which is the best buy?

First you will need to identify what you want the restaurant to accomplish. There are a lot of techniques of buying a restaurant, that can be learned from restaurant franchises. Those who operate a restaurant chain know it is a rat race to locate and buy a good location for a restaurant. There is a competition to find the best sites, and if you don’t get there first you will lose out. Buying a restaurant is very serious business, and those with restaurant chains will purchase several locations at once to reserve the best spots for their restaurants. Their goals are clear and the plans to achieve that goal are already drawn out.

Remember, when you buy a restaurant, you will also be buying it’s reputation, problems with the building, parking facilities, and other problems your predecessor had. You may think you will be able to turn the business around, and you may be in for a big surprise. When you buy a restaurant, your success will begin, and hinge on, a solid business concept.

You really need to determine what your motivation is for buying a restaurant. If you don’t have a specific goal or idea, you will waste a lot of time searching for the right place to buy. The longer you look, the better the chance that someone else will grab up your ideal spot.

What is your goal when you buy this restaurant? Do you want an establishment that will make you enough money so that you will be able to retire in less than 20 years with over $400,000 in the bank, or are you looking for the ability to make $60,000 a year and live a normal life? You can choose to buy one restaurant, or own an entire chain of them. If you don’t care about the wealth factor, then you will probably only want to buy and establish one restaurant.

In any event, you need to have a clear idea of the goals you have before buying into the restaurant business. Do you have the energy, desire, and the capital to run a 10,000 square foot restaurant? You will need to be realistic when buying your first restaurant. You need to determine how much money you will have to invest in the restaurant, this will have a large effect on the size and type of restaurant you purchase.

Doing in-depth research is the biggest factor in creating a well detailed plan to reach your goal of buying and running a restaurant. You will need to gather demographic information on who your customers might be. Once you learn this, buying a restaurant will be a great deal easier. It will let you know to look only those locations that your targeted customers would frequent.

Successful restaurant buyers use the following to go about buying a restaurant:

• Net Cash Flow – The minimum cash flow the restaurant will need to generate to meet your goal, and the rate of return you will need on your investment.

• Profits Record – There should be a profitable history for the restaurant. Check what the sales have been for the past three to five years. This will show how well the operation did during this time. Pay attention to whether the profits went up as the years passed, if not find out why and whether you can turn that trend around.

• Price Range – How much work will you need to do to bring the establishment up to your operating standard? Adding this to the price of the restaurant will tell you how much startup cash you will need.

• Location – You will want to buy a restaurant located in an area that will have a good deal of the type of people who will frequent your restaurant. Real estate professionals can often provide you with a demographic profile of the area so you will be able to see the current population, and projected growth. They also include the income household size and the age of the consumer. Wholesale suppliers are also a good source of information for those looking into buying a restaurant. They can tell you what areas have grown the most, and they know which restaurants are doing well, by the volume of orders they receive. They may also have heard about restaurant owners that want to sell their establishment.

• Accessibility and Visibility – Another telling factor is how much traffic the area gets, and how visible the restaurant is to a potential customer. You must also make sure people are able to conveniently get to the restaurant you plan to buy. Make sure you will have enough parking and that public transportation is available in the area.

• Capacity – Figure how much square footage you will need to have the type of restaurant you have planned. This will be based on your goals for income, and must be calculated well to assure the success of your restaurant.

Other considerations are: The terms of the lease on the building; are there restrictions imposed by the government, in this area, and what are they; does the restaurant you are looking at have a good reputation; the condition of the building; and will the owner be involved in helping you get established?

By: Mario Churchill

Article Source: http://www.directorys.uniquearticles.info

Mario Churchill is a freelance author and has written over 200 articles on various subjects. For more information on buying a restaurant checkout his recommended websites.

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