The median price for buying a restaurant is $150,000. This can be a sizable investment for some. If you are thinking about investing your hard earned money in a restaurant, you need to do your due diligence.
Buying a restaurant is a commitment, and you need to consider the pros and cons of your decision. To help you get started, we have a list of some of the most common pros and cons.
Pro- Already Trained Staff
When you take over a successful business, you should be able to keep the existing staff. This benefits everyone. The staff can keep their jobs, and you can save on hiring and training costs.
You can also make sure the restaurant stays successful by keeping the staff that knows what the standard is. They can help guide you in what works and what doesn’t.
Con- Unwelcomed Change
It won’t be easy to keep the existing staff. They are used to the old ownership and knew what was expected of them. With new ownership comes change, and not everyone likes change.
Prepare to have some pushback when you start to make changes.
It isn’t just your employees that will struggle with change. Your inherited customers will also struggle. Change the name of the restaurant, and customers might get confused and not give your restaurant a chance.
Change the menu, and you might find you have alienated customers. Prepare for complaints that you have gotten rid of their favorite dish.
Pro- Already Own Equipment and Inventory
When you start a restaurant from scratch, you will need to plan for a large portion of your budget to go towards equipment. You will need everything for both the front and back of the house:
- Grill top
- Fry station
You will also need to invest money in food and beverage inventory. This can be risky when you are just starting and have no idea how much you need.
Stepping into an existing restaurant, you know exactly how much inventory you will need. As long as the previous owner or manager kept decent records, you will have a blueprint for demand.
Con- That Equipment Is Aging
Depending on how old the building and restaurant is that you buy, you may be purchasing a dinosaur. Now you will have to invest more money in replacing aging and broken equipment.
One significant expense could be the plumbing and heating of the building. This equipment is vital for the comfort of your customers. If it breaks, you will have no choice but to get it fixed.
Make Buying a Restaurant a Reality
Buying a restaurant can be both exciting and scary. One way to reduce the risk factor is to buy an existing restaurant.
This way, you can save money and benefit from the already established positive reputation.
Check out our other business article for more advice on making your new business venture a success.