I talk to a lot of restaurant owners and it breaks my heart every time one calls me and tells me he or she is burnt-out and needs out of the business now but in their final analysis, the owner talk themselves into trying to turn the business around because they think they have what it takes, but they never do. So a couple years later I get the call. Their business has declined more and they need to sell now.
Often the reason for selling is simple...they're burned-out. They lost the edge, the passion and the desire. A restaurant business tends to do that because of the high demand on one's time and attention. It's the nature of the small restaurant business that can't quite afford a general manager to help manage the business.
At one time, their restaurant was hi-flying, making tons of money. But as restaurants tend to do, they fall out of favor over time unless the owner can reinvent the business, reinvest in it and revitalize the menu and the ambience, which given their mental state of near depression and exhaustion, is a bit challenging to accomplish and frankly they rarely do accomplish the change.
So they somehow convince themselves they have what it takes to turn the business around and get it back to its glory days. They rarely do. Instead a few years later they call me and now the business is worth nothing more than an asset sale as they're breaking even or even losing money.
What breaks my heart is the owner has given the business his or her life blood, they've worked so hard, but they are so buried in the trees they can't see the forest.
Knowing when to hang-it up, to throw in the towel, is the most critical decision a restaurant owner can make. Recognizing the signs of burn-out and knowing that one isn't going to suddenly wake-up one morning and feel great about going to the restaurant for the 2,000th time since opening it, is the most important realization one can experience in a decision to perserve some of the investment the owner has made and sell it.
To know that getting some money for your restaurant and handing it over to new owner who does have the passion and desire to turn the business around is a smart decision. Knowing that you need a break and the money you get for the restaurant will support you while you recover and revitalize your passion and get new ideas is like spending a summer is a hot place (like where I live in Scottsdale) and then one day sitting on a lake in the Sierra's where the weather is perfect and cool, its total refreshing.
Then, and only then, are you ready to get back into the business. Not a minute before.
So don't fool yourself. You're not likely to turn the restaurant around.
Mel Jones is one of the premier restaurant brokers in the nation having published hundreds of articles on buying and selling a restaurant and bar business, selling thousands of restaurants in CA., WA and AZ and building one of the most copied business models in the brokerage industry. Mel started SellingRestaurants in 2004 with the one simple concept, give the buyers the information they need to make intelligent buying decisions without being pestered by a broker or hiding information, prepare the business for market by researching key details that make or break deals and educate the buyer on the buying process to create an intelligent buyer. Prior to SellingRestaurants, Mel was a Chief Financial Officer for Universal Music Group, the largest music company in the world. There he participated in more than $11.5 billion of merger and acquisition transactions. He also work for top companies such as Nestle Foods, USA. He hold a Bachelors in Business Administration Finance as well as attened Law School at Gonzaga University. Give Mel a call at 480.274.7000 or e-mail him at [email protected] if you have any questions.