Starting your very first restaurant from scratch is quite a handful challenge. An alternative would be to buy an existing restaurant. Surely, it has name recall and existing customers, which is truly beneficial. But if there are current customers, then you might ask as to why the owners put up their restaurant for sale.
Two reasons: either retirement or they are losing money, which for others is definitely a deal-breaker. Yes, there are no certainties even for the restaurant business, whether new or existing. But if you do your homework, you may find yourself owning a restaurant for sale somewhere in Edmonton.
Factors to Consider
Just like starting a new restaurant, a pub or a diner, there are several factors you must consider before deciding whether to buy it or not. Of course, the utilities and labor costs, the suppliers, rent, and taxes, among other expenditures.
But more importantly, you should consider studying the location and the demographics.
Benefit of Existing Business
What type of customers comes in, what time of the day is the busiest, which foods sell best and which are not – these are just some of the information you can get from the sales history of an existing business.
This gives you a better idea how the previous transaction goes if there’s a need for some changes or should you scrap the idea altogether. Yes, there are no certainties in business.
But these data gives helps you get a better understanding of what should be done to increase the sales and become more profitable, should you decide to buy it.
If you plan to assume the ownership of a business, the first thing to do is study the business’ books. This is usually the deal-breaker – no book, no deal. Usually, sellers are open to show the books if they really intend on selling their business.
Also, make sure that the current owner is not selling the firm because they intend to put up the same business nearby. If the agreement includes the business name, lease, license, and most of all, the owner’s recipes, make sure they are willing to sign a non-compete clause.