“I’ve always wanted to own my own restaurant”
We hear this one a lot. You might have a passion for great food, you might love the bar scene – but these loves from the patron perspective rarely translate to success on the business ownership side unless some basic requirements are met.
What are these requirements?
There are very few people who have little to no restaurant industry experience that have succeeded as the owners of a food service establishment. More often than not, the restaurant industry rookies that manage to buy a bar or restaurant drive it right into the ground in a shockingly short amount of time (we say “manage to buy” here because many property managers will refuse to issue a commercial lease to restaurant newbies).
The food service industry is rough. It requires an enormous commitment of time and energy. It requires the personality to wrangle a staff of typically young and inexperienced servers and bartenders while simultaneously ensuring no one is giving away your food and booze or taking money out of the till.
Sounds like fun, right? Not so much. If the restaurant industry is your passion, and you’ve spent a good deal of your working life learning the ropes as an employee or manager in this industry – then restaurant ownership will probably bring you success. If you don’t have the passion or experience, you should seriously, seriously consider something else.
If you have $100,000 to invest in a restaurant, then you shouldn’t be looking at restaurants in the $100,000 price range. Why? Writing a check for the full amount of money that you have just to take ownership of a restaurant or bar means you are setting yourself up for an almost immediate failure. Working capital is essential in any industry, and the restaurant industry is no exception.
You will need money available for the litany of licensing requirements necessary for establishments that serve any form of alcohol. You need capital available to cover payroll for the first few weeks after you take over. You need the money to pay your vendors for the inventory you need to keep your patrons fed and happy. You need enough money to keep the doors open long enough to start turning a profit with you at the helm.
Consider the need for working capital when deciding what you can and can’t afford in the restaurant-for-sale market long before you start writing any checks.
Willingness To Work 24/7
If you are someone who is very involved in the lives of your children and need to be home every evening to help coach their soccer team, then buying a bar is probably not for you. The restaurant industry requires long, weird hours (think about when most restaurants and bars are open – like nights and weekends), so if the life you want to have outside of business ownership does not jive with these hours you might need to consider another industry.
It’s also not for you if you are the kind of person who likes to take a handful of long vacations every year. This industry deals with a lot of cash, and as such it is an industry where it is incredibly easy for employees to steal a little off the top. Successful restaurateurs are vigilant and omnipresent in their establishments to ward off these sticky finger issues.
If you have the drive to keep strange hours, the experience to get you through and enough capital to pay for the bar or restaurant you are interested in – then you have a great chance at success. If not, then there are plenty of other industries where you can meet your goals for business ownership without having to serve food or sling drinks. Talk to your business broker today about your goals and experience and they can help guide you to the right business.
Have you always dreamed of owning a restaurant, but don’t believe us when we say prior restaurant experience is a must? Have you had a disastrous restaurant or bar ownership experience that could help others that you’d like to share? Please feel free to leave comments or questions here and we will be happy to help.
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