What to consider before buying out a Restaurant (Part 1)

It is imperative that you figure out certain important facts before finally going ahead and purchasing a restaurant. Even though restaurants are one of the most sought after business opportunities, one cannot neglect the importance of doing a before hand research before purchasing one. If the entire matter is approached in a systematic manner, you may end up being a proud owner of a popular restaurant with an already built customer goodwill.

Get behind the picture

Any restaurant that goes up for sale would definitely have some reasons behind it. A little research would reveal the real story, however, most of the times the answers are right on the surface. It may be the case that the restaurant no longer fancies the likings of customers or there may also be certain pending legal and financial issues surrounding that property.

Do a thorough check of all the accounting books

Anyone desiring to buy a restaurant at a premium value would do so to make some handsome profit. To make sure that your venture doesn’t go haywire, make it a point to put on your detective hat and have all the accounting books examined thoroughly by a reliable accountant. You definitely wouldn’t want to put your money in a venture that is already in red. An able accountant will be able to figure out the hidden expenses (if any), the payment patterns, the bank account details etc… and let you know about the financial health of the restaurant under consideration.

Is the Restaurant in the good books of its Clients and Partners?

Restaurants build their clientele mainly due their reputation. An effective way to gauge the restaurants reliability is by contacting the vendors associated with the restaurant and finding out if they get paid their dues on time. In the event their answer is negative, then that should immediately get your thinking horses rolling. When assessing the customer service levels of a restaurant there is no better way than experiencing it first hand. However, this must be done prior to your expression of interest in buying that restaurant. You can even employ a few mystery shoppers to prepare comprehensive reports for you.

It really doesn’t matter much whether you are purchasing a franchisee outlet or are planning to buy a one-of-its-kind restaurant. What’s more important is the business system underneath the existing business entity and it’s crucial elements. If the restaurant’s concept is based on some serious business initiatives, it’ll definitely pay rich dividends in the long run. Once you’ve clinched the deal, you must communicate the goals and targets for the restaurant right at the outset.