August 19, 2016
Anyone who has spent time looking into purchasing a restaurant should know that they are constantly available in large numbers, and prices are usually lower than expected. One may see the affordable price of an available restaurant and think that it might be the perfect time to buy. However, simply being able to afford a restaurant does not mean that it’s a good investment. Before you buy a restaurant, there are many factors, aside from price, that one must consider.
Buying a restaurant might be your dream. But, before you jump into the restaurant business, you should face certain realities. Because, in order to avoid your restaurant becoming another statistic, you must find a way to stand out from the pack. Unfortunately, stellar food isn’t usually enough to elevate a restaurant to success. In addition to delicious cuisine, a restaurant must offer something else to draw a steady flow of customers. Whether it’s a desirable atmosphere, a recognizable brand, or enticing entertainment, successful restaurants always find away to separate themselves from the saturated market.
The restaurant business is one of the hardest industries to succeed in, as restaurants have one the highest failure rates of any business. According to an Ohio State University study, 60% of restaurants do not survive their first year, and 80% are closed within five. However, like any business, if run properly, a restaurant can not only survive, but thrive. Lack of preparedness and inexperience are the main causes behind restaurant failure, so, here are a few things that you must consider before you buy a restaurant.
A major factor in the success of a restaurant is location and accessibility. Business can be driven by proximity to areas with a high volume of pedestrians, such as a thoroughfare, a movie theatre, or shopping center. Unless a restaurant has built up a local reputation or has extensive advertising, they can be dependent on walk-ins. Before you buy a restaurant, ensure that you are confident that its location will be conducive to success. Is it easily accessible? Is it prominent from the street? Is there available parking? Is there a steady flow of people walking or driving nearby? These are all questions a potential restaurant buyer must consider.
A restaurant owner must not only pick the right location, but also appeal to the primary audience that they are serving. For example, if the restaurant is located near a suburban neighborhood, the owners should consider making it family oriented. Understanding the clientele is a crucial element of running a successful restaurant.
Prime location is generally not enough to ensure a steady flow of customers. In order to draw crowds and keep traffic high, marketing is a must. Before you buy a restaurant, you must be aware of the considerable advertising costs required to create awareness. You must decide what channels to advertise in, the amount of emphasis to put on social media vs. traditional advertising methods, and the amount of capital spent on marketing. A restaurant owner should never underestimate the importance of creating buzz and generating awareness.
Running a restaurant comes with copious operating costs. Before buying a restaurant, it is important to assess your needs in order to keep costs as low as possible. For example, a restaurant kitchen requires a lot of industrial equipment, such as a walk-in fridge and a dishwasher. However, in the interest of cutting costs, a restaurant owner must decide which equipment is required and which can be left out. Also, before buying a restaurant you must consider the amount of staff necessary for the business to run smoothly. Hiring too many employees can result in unnecessary expenditures, while hiring too few can lead to inefficiency and unhappy customers. Ultimately, understanding all of your needs before purchasing a restaurant is critical to keeping costs down, and can dictate the success of the business.
Do you dream of buying a restaurant? Then you definitely should not take the process lightly. While the failure rate is high, it is not impossible to run a successful and profitable restaurant. Preparedness is the key to success. So, make sure you conduct thorough research. And, have a comprehensive understanding of what you’re buying and what you’ll need before you make this monumental investment. To view available restaurant properties, visit Metro1.com today!