Buying an existing restaurant business can be a great way to get into a successful and profitable business with low risk and high rewards. But there are definitely things to watch out for when you are looking at a potential purchase, and you want to go into the process with your eyes open.
Here are ten things to take into account when buying an existing restaurant business:
1.Be sure you find out everything you can about the location. Has it been a restaurant for a long time? Does it have enough parking? Can you get a good lease (the lease shouldn't be more than 10%, and preferably 5% or less, of the gross sales)? Is it secure? Does it meet permit requirements? One of the
biggest problems new restaurant owners face are undisclosed issues with the building or landlord, or a lease that is impossibly high.
2.Verify the current business is doing the sales the owner claims. Most independent restaurants have terrible books, and often the owner won't disclose their tax returns, because they are underreporting their income. It is very difficult, therefore, to know exactly how much business they are doing. If you never see anyone in the place, however, and they are claiming great sales, you should be very suspicious. You should be using a restaurant specific financial projections tool to help you estimate all your startup and operations costs, such as the one available from http://www.restaurantfunds.com.
3.Make sure you understand what your actual payroll costs will be. The current operation may be profitable because the owner has his family working for free, and the employees are paid under the table. Don't base your figures on what the current owner is doing, base it on what it is actually going to cost you to run, then see if it still makes sense.
4. Figure out where the customers are coming from, and make sure you will continue to get them and can grow the business. If the location is maxed out, or if the customer base is likely to go with the current owner because they are mostly friends of his, find that out ahead of time.
5.Be wary of owners that require all cash buyouts. If they aren't willing to take at least a reasonable portion of the price of their business over time, it may be because they know something you don't about your chances of success once the deal closes.
6.Get the owner to sign a fair non compete agreement. You don't want them to open a new place right down the street from the place you just bought using the money you paid them, and then have them take all the business you thought you would be getting.
7.Find out how seasonal the business is going to be. It may look great during the summer tourist season, but turn out to be a money loser the other nine months of the year. Talk with other owners in the area, and try to get at least bank statements showing deposits going back a few years so you can see what the sales trends are going to look like for you.
8.Figure out ahead of time what kinds of terms you can get from the vendors who supply the food. This is going to make a difference in your cash flow situation, and you want to know ahead of time that you will be able to set up accounts to supply you with the materials you will need to make the business run.
9.Check the equipment for anything that will need to be refurbished or replaced in the next twelve months. You don't want to walk into a situation where you will need to outlay a lot of cash upfront to get the place in shape. If you do find problems, use them to negotiate a better price.
10.Get everything in writing, and use an escrow service or a lawyer, or both, to review and complete the deal. You are making a big investment, and you don't want to get taken advantage of or find out too late you bought something other than what you were expecting. The small cost of these service providers is nothing compared with the cost of a bad purchase.
Use these basic tips to make sure you aren't getting yourself in trouble and are buying a profitable and long term cash cow with your hard earned investment.
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Rat extermination is not as simple a process as roach or ant control is. For roaches and ants you can simply spray pesticide and they will be controlled. But it is not so in the case of rats. For rats you will need to adopt a completely diverse approach. Unlike roaches and ants, rats can smell the various dangers around them. They will use every tactic to avoid the various pesticides and sprays, to stay alive. To effectively carry out the rat extermination, you will need to use various do it yourself pest control methods.
When you decide to handle the rat control problem yourself, the first thing that you should check out is their place of residence. After locating their living area you should find their path into your home. That is how they enter your home. They can come through the roof, some holes in the basements or doors. Try to block all the incoming routes for the rats. Normally the rats look to live in a dark places where there is no noise. So you can look into your store rooms for balls of fur. Keep track of all the dark nooks in your home. Also take notice of their droppings that rats will have left on the way to their holes.
After you have discovered the rats place of residence, you next need to decide on the method of rat extermination that you will utilize. Gather the pest control items that you will be using to kill the rats. There are lots of methods to control these rodents but which method to choose will depend on where the rats are residing. You should take into consideration the accessibility of the area. If the area where the rats live is open and large then you should use a snap trap. In open areas, a snap trap is the most effective method to kill the rats. This trap will use bait to lure the rat. Bait is connected to a spring propelled lever which will close or shut down as soon as the rat eats it. In this trap, the death of the rat is immediate without putting the rat through the ignominy of staying in the trap.
Now if the rats are staying in some narrow or closed part of your home then you should make use of a glue trap. In the glue trap, there is a long strip of glue like substance covered by plastic. In the UK these glue traps are easily available at the pest control shops. The plastic gets peeled off and the trap is placed in the rat infected area. As soon the rat steps onto it, it is trapped forever inside it. In this trap the rat is not killed. But the rat can also not escape from the glue trap. There is a plastic bag tied to the glue trap and the rat will be trapped into that. You can dispose of this plastic bag. This will also help in the sense that no other animal will be able to eat the rat inside the plastic trap. By using these home remedy pest control methods of rat extermination, you can keep your home free of any sort of rodents.
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