Catering is a difficult sector, but it can also be quite lucrative and satisfying. There are so many things to consider before buying a restaurant, there is a lot to think about. It's easy to fall in love with the idea of giving it a try, but the reality is far more difficult.
Steps
Step 1. Before buying a restaurant, you should have the right requirements
There are several headaches you will have to solve before you can buy one. The first is to negotiate with the current owner and actually buy the restaurant business, so you need to have the money, reliability and experience you need to get into the business. If you don't have a lot of knowledge, you could start a franchise. The second factor is the amount of money you have in your hand and the working capital. You will need a lot of cash and working capital to buy a restaurant business. For example, if a person buys one for € 200,000 without a loan, then he or she will need around € 250,000 in cash to avoid worrying about the ancillary real estate costs, purchase price and operating capital. Don't take the risk of being broke, as this severely increases your chances of going bankrupt. If you want to apply for a loan, it will be more difficult for them to grant you it if you do not have several years of experience in this sector, as a manager or owner, and you do not have good creditworthiness to pay everything you owe.
Step 2. Define what you want and, above all, what you prefer for your lifestyle before you go in search of the perfect restaurant
The authors of the book Appetite for Acquisition wrote a whole chapter on the 10 questions you should ask yourself before starting your research. They can include questions about the earnings you need to stay afloat and your lifestyle. Factors like this must be considered by each individual restaurant owner.
Step 3. Choose your target customers
Are you planning to sell pizza by the slice to young professionals or are you looking for more mature and sophisticated customers? A varied menu aimed at experimentation could be ideal in the second case, while in the first case you should bet everything on a more traditional selection, focusing on the quality of the ingredients. Remember that younger people eat out more often, and don't usually consider this outing as a special event; however, they rarely spend more than € 10-20 each. On the other hand, they are likely to spend less time in the venue, so adding more seating is a good idea to overcome this problem. Older people generally allow themselves to go out for dinner less often, reserving them for special occasions or when they want to give themselves a gift; as a result, they are likely to spend more, both in terms of time and money.
Step 4. Choose a seat
The restaurants located in the center of a city, which have ample parking and which are located near pubs and cinemas are usually the most successful, but are more expensive to maintain than those in the suburbs; however, the turnout of customers will be higher.
Step 5. Confirm that the area of your choice is inhabited or frequented by the demographic groups belonging to your target
Research household income and consumption habits in the neighborhoods you consider. Can they afford to eat regularly at a restaurant like yours, and most importantly, do they? Online you will find several databases to learn more about income and consumption habits; these reports are worth spending a little on in order to have more information in hand before making a decision.
Step 6. Choose a specific restaurant you want to buy
Before introducing yourself to the owners, visit them as a customer several times throughout a day to analyze the turnout. Count the tables and try to estimate what the various customers will pay, so that you can compare this number to the price that will be asked by the seller.
Step 7. Make an offer to buy the restaurant
Check the books of the current owners. Visit often to gauge the turnout, several times a day. Look at customers' consumption habits and their clothing.
Step 8. Consider all costs
The restaurant may need to be refurbished or perhaps more modern equipment needs to be bought. Calculate expenses in light of what you will earn, the type of customers who frequent the place and the dishes they order most often.
Step 9. Spread the word
While word of mouth is the lifeblood of a restaurant's success, promoting it in local newspapers or handing out flyers may be necessary, especially if you're looking to revive a run-down business.
Advice
- Opening a restaurant is not easy, but by doing the right calculations and studies you will have a much better chance of being appreciated.
- Successfully managing a restaurant will allow you to make a name for yourself and make great profits.
Warnings
- If you rent it before you buy it, the lease shouldn't be financially unfavorable.
- Having a restaurant is a commitment that will keep you busy 24 hours a day. You must prepare yourself to dedicate your entire life to the project, at least during the first two years. Too many people only see the fun and glamor of this job, not knowing that there will be nights when they will have to sleep in the office because they will be too exhausted to go home.
- Find out what are the real reasons behind the sale of this restaurant business.
- Go to the restaurant you want to buy at unusual times, count the customers and calculate the prices of what they order. Observations of this nature will let you know if the books are true.
- Make sure you have a solid business plan before purchasing. Make an appointment with a financial advisor and find out as much as possible about the industry and this restaurant.
- If you've never worked in a restaurant in your life, try to get some experience before buying one. Try to expose yourself to all aspects of the business, from cleaning the tables to the work of the kitchen staff, passing through the management (purchasing, hiring staff, setting timetables, making the menu, etc.).
