Buying a Very Successful Restaurant - By: Richard K Parker

As we all have to eat and drink to survive, the would-be entrepreneur has long been attracted to a business within the food and beverage industry. While this may be a fundamental need for us, remember that you need to consider a number of complex and interrelated issues when you are thinking about buying a business around an existing restaurant. Did you know that only one in 10 purchases usually succeeds? As such, you will need to value correctly and be very diligent if you are to survive against these odds.

One of the key skills that you can possess when you get ready to buy restaurant business is the ability to communicate and to decipher information. You will need numerous meetings with the seller and don't be surprised if the early ones don't reveal some fundamental facts and figures. It is natural for the seller to be a little protective and to want to gauge your enthusiasm and see whether you are really serious and qualified before divulging delicate data.

There are some basic facts and figures to absorb before you are able to project your own figures for the future. What style of food does the business favor and how many tables are there in the restaurant? How many covers, or meals are set per week and by day and if the menu is very specialized how strong are the supplier contracts and the subsequent supply chain?

Labor is one of the greatest costs in any business and in particular here. Find out how the costs breakdown and whether the strength of the entire business is based on the skills and strong personalities of key figures, notably the master chef. You may not expect to get a lot of the finer detail during the early process, as a seller often wants to keep any news of a potential sale away from the employees until the appropriate moment.

Write up a checklist of questions to ask the owner, you should have hundreds and not be afraid to be very specific, nor to insist on detailed answers. Before you do this, though, remember that this type of business involves working long hours and can be a seven days per week activity. You will be required to deal with many "fires," be great at managing people and your time and may not expect to see a specific net profit for quite a while.

Some of the challenges you may well face as a new owner include the ability to consummate new relationships with your suppliers. Some suppliers may look at the change of ownership as their chance to significantly alter their contracts or prices. You must be able to deal with distraught people, who may be upset because their table is not available, even though they booked it but arrived late. You must be able to motivate your employees and be able to handle all situations immediately, resulting in praise or termination accordingly.

When you're sure that you are cut out to buy business interests in the restaurant industry, have tabled the right questions and received the comprehensive answers, are happy with your interpretation of the financials and contracts, then you are ready to discuss the value. Always work with knowledgeable experts in the field who have experience in the restaurant industry and use their findings to backup your own thoughts. Consider what the bottom line is, the salary take of the owner, the net profits and any benefits and adjust the figure down according to any capital investments you consider you may have to make.

With a restaurant for sale, expect your three major costs - food, labor and rent to be no more than two thirds of your total expenses and make sure that you have a first-class marketing plan so that you can tell the world about your new baby.

About the Author

Richard Parker is the President and founder of the Diomo Corporation - The Business Buyer Resource Center. His inspiring materials, seminars and consulting have assisted thousands of business buyers with achieving their life long dream to buy a business. Want to learn more about effective business buying strategies that actually work, then look no further than=> http://www.diomorestaurant.com

Article Directory Source: http://www.articlerich.com/profile/Richard-K-Parker/53039

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