If You Build It, Will They Come? Lessons on Why You Should Buy a Restaurant Instead of Building

Buying a restaurant in any major city has reachedfierce. You want to be the first to market with
a new height of popularity. Would-be smallthe latest ideas. There is no waiting on your
business owners are meshing a love of food withrestaurant to open when you buy a restaurant
a desire for business ownership to createversus building from scratch.
unprecedented demand for restaurants for sale.Every brand new restaurant suffers as the sales
With high failure rates on start up restaurantsvolume builds. That is not the case with buying a
(nearly 60% fail by year three), well-knowngoing concern where restaurant sales are already
restaurants with a track record are hotestablished. Even a restaurant undergoing a
commodities. Earning rewards in the restaurantchange of concept has an established traffic
industry comes quickly to those that buy insteadpattern from the current location. Buying these
of launching a new restaurant. Restaurant buyerssales in a restaurant purchase can be far less
find the advantages are immediate and the risk iscostly than developing them over time a
minimized. It is no wonder this path to achievingcustomer at a time or a marketing campaign at a
the dream of owning a restaurant is comingtime. Growing sales from $1000 a week to $2000
through the purchase of a restaurant for salea week means a 100% increase each and every
rather than the start up of a new concept.week before you realize baseline volume to
Managing the cost is the number one reason tosatisfy your costs. That can be a difficult job in a
buy over building. Restaurants can not succeedcompetitive restaurant market.
when the cost of capital exceeds the incomeA significant reason for most to buy restaurants
over a sustained period of time. Lack of capital isfor sale is the cash flow from existing operations.
the single biggest reason that most restaurantsManufacturing and retail businesses often sell for
close after only a few months. Just because amany times cash flow while restaurants with
sous chef is brilliant in the kitchen will not mean hegood books and records can often be acquired
or she is equally skilled at managing constructionfor three times earnings or less. A restaurant
simply because a restaurant is being built.owner can buy a restaurant for sale and pay off
Restaurants built from the ground up are closerthe purchase in less than three years leaving
to the cable TV "flipping" shows where the costshimself with a debt free earning machine. That is
far exceed the budget and the timeline stretchesa very attractive financial scenario for most
beyond the original goal.restaurant buyers. Brokers that specialize in
You can shorten your time to market when yourestaurants for sale have access to listings and
buy a restaurant for sale. Evaluate whether youinformation on multiple opportunities in the
want to be in business next week serving yourmarketplace. Buying that established restaurant
latest special or waiting an average of six monthsfor sale gives you clear costs, verifiable earnings
for licensing, permitting, building and then openingand instant revenue. That is the fast path to the
your restaurant. Competition in major marketsrestaurant industry for most.
like Atlanta, Georgia or San Francisco California is