Buy a Restaurant or Bar Concept – or Make Your OWN?
Some Things to Know Consider…
I came across the story of Ruth’s Chris Steakhouse the other day – it speaks of humble beginnings, Ruth’s desire to do “something” to put her kids through college, mortgaging her home, all to buy a business – Chris Steakhouse.
We work with both kinds of Restaurant & Bar concepts. Some entrepreneurs have a goal and some kind of vision, or they love to make a special type of food and they want to share it with the world, so they start a new concept. Other restauranteurs shop around for a business that appears to be a good investment they can build on – like Ruth.
If you are working with an unique concept and zero experience in opening a restaurant or bar, you will want to enlist some help. Depending on what you are “good at” or what product or service your talents can create, you probably don’t have the ability to put all pieces of the puzzle together. A potentially successful concept needs several components to achieve successful – not just one. You need to have a few of the following:
1) Great “product” or ”experience”
2) good service delivery
3) some advertising or a ton of walk-by traffic. If you have the walk-by traffic, your exterior/interior will need to look inviting to the right kind of people. If your plan involves advertising to get people to your location, it needs to be focused and you need to deliver your product/service consistently.
4) Having a plan for problems that may arise, and pre-preparation for contingencies is recommended.
SO – figure out what you are good at – then hire specialists to help with the rest.
If you purchase a restaurant and/or bar, some of the key things you should have in the agreement and under your belt before the current owner exit the picture are:
1) Discover the “original” idea behind the restaurant or bar. What was the vision? Did it work?
2) Understand your strengths and be able to train new staff to maintain consistent cooking, serving and service.
3) Understand what the most loved, and profitable, items are and promote them.
4) Know what items are least purchased and consider phasing them out.
5) Get the full scoop on ALL business neighbors, and get to know as many as possible.
6) Understand how the Bar/Restaurant has successfully marketed in the past.
7) Find out if any campaigns were complete failures – no need to do that again!
8) Plan time to work elbow-to-elbow with the current owner for several weeks, if possible, as there are normally fine/subtle things that they may do on auto-pilot that they may forget to share or provide in writing.
9) Get introduced to suppliers, and understand why they were chosen.
10) There are tons of legalities to cover when purchasing any kind of company that I can’t cover here, so ask your friendly neighborhood attorney for help!
11) Make sure you will have access to the past owner for a good long while. A past owner who wants to cut-and-run may be hiding something.
12) Don’t change much in the beginning – you probably purchased the concept because it was successful in some way – if you change things too quickly you can disorient the fans who make the business thrive and pay the bills.
But back to Ruth – she purchased a concept, she figured out what they did very well, and improved on the rest. Now it’s your turn!