If you have always wanted to get into the restaurant business but have no idea where to start, then buy an existing restaurant and hit the ground running.
With an existing restaurant you will have:
- A business with an established marketing reputation,
- An instant clientele and staff,
- A history in the restaurant business that you can study and use to grow the business further.
When you buy an existing restaurant, you can set yourself up to lose a lot of money if you do not pay attention to the details. Before you sign a purchase agreement, there are some angles you need to cover to make sure that you are buying a restaurant that you can make successful.
Pay Attention To The Public Opinion
The current owner of the restaurant you want to buy may not tell you the exact reason why they are selling, but you can do your own research to find out if it is because the business has lost favor with the public. Drive by the restaurant at different times of the day to get an idea as to what kinds of foot traffic it gets and spend time with some of the customers to find out what they think.
You are interested in:
- The customers’ opinion of the food and service in the restaurant,
- Whether or not the restaurant has a favorable reputation in the area,
- Any negative comments people may have about the owner, the restaurant itself or anything to do with the business.
Check With The Local Health Department
Whenever you buy any business, you should be prepared to do your own research and get the important information you need for yourself. With a restaurant, you need to check with the local health department to see if the business you are considering has a history of health code violations.
The primary reason for checking on health code violations is to see if you may need to invest a lot of money in the business to get it up to code. The other issue with health code violations is that a long history of problems means that you will have a problem keeping customers.
Check The Location
If you are buying a restaurant that specializes in lunch, then find out where it gets its customers from. Are there businesses nearby that frequent the restaurant at lunch time, or is the restaurant in a bad location to attract the business lunch crowd?
Your restaurant has to be in a spot where people can see it and easily accessible to some kind of target audience. Whether you are going for the business lunch crowd or the fine dining dinner business, your restaurant needs to be accessible to your audience if you want to find success.
Will Customers Follow A New Owner?
Many restaurant customers become loyal to a restaurant because they enjoy the food and the atmosphere. You could be risking the loss of substantial business if you buy the restaurant and change things to the point where regulars do not come back.
On the other hand, there may be people who love the food at the restaurant you want to buy, but they are unimpressed with the pricing and the facilities themselves. In that case, you can make changes to the restaurant so long as you do not alter the menu too much.
You will need to enlist the help of people you trust to start visiting the restaurant you are considering buying and find out if the regular customers would follow a new owner, or if they would stop going to the business completely. Regulars offer a nice and stable income that your business will need when you get started and you should take their opinions into consideration before making your purchase.
Avoid Costs With an Established Restaurant
Buying an existing restaurant is a great way to get into the restaurant business without having to worry about ground floor investments such as menu development and marketing. As long as you do your homework before you sign the purchase agreement, you should be able to buy the restaurant you want and turn it into a success.