I talk to a lot of restaurant and bar buyers each day. I wish they could hear me when I say it is cheaper to buy a successful restaurant then a troubled restaurant.
For example, let's assume a buyer has $75,000 to invest in a business. Let's further assume they have the experience and the credit to obtain a loan.
The buyer has two choices. Buy a business for $75,000 that's barely making money and has struggled for years, or buy a business that's earning $160,000 a year with the same $75,000 but get an SBA loan to finance the $375,000 purchase of a successful restaurant.
Some people are afraid of debt, and I understand that. But it is irrational to be more afraid of debt than failure and constant daily struggle of meeting payroll, rent, vendors bills.
I always hear about "I'm a great cook" or "I have a great concept" and that could all be true. But why not slowly add your personality to existing successful restaurant then taking the risk of buying a failed restaurant? Makes little common sense to me.
But the caveat is don't come into a successful restaurant and start making massive changes to staff, menu and look and feel. That too can lead to failure.
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 click here to email him if you have any questions.