The Well-Known and Frequently Forgotten Basics of Buying a Business in the Restaurant Industry
Australia has long been renowned for its diversity. With so many cultural influences, from its aboriginal roots to European and Asian inspirations, Australia is truly a melting pot. Not surprisingly, it is also a highly profitable place to do business. In 2006, the Australian economy was ranked number one in the world for resilience, which makes it a very attractive prospect if you are buying a business in Australia.
If you are exploring businesses for sale in this remarkable country, the restaurant industry is most likely near (or at) the top of your list. Not only is Australia a tourist attraction, its residents have adopted a laid back approach to life. Surrounded by natural wonders, they enjoy the outdoors but they also know how to appreciate the finer things. Thus, many lucrative businesses for sale are restaurants.
Nonetheless, there are a few very important details every potential business owner must remember about starting a business in the restaurant industry. Not only is this venture financially rewarding, it is also very unique. Starting out, many restaurant owners are romanced by the idea of running their own eateries. Some are overjoyed at the thought of digging through family recipe books and starting a diner from scratch. Others fall in love with an existing concept and are unable to let it go, even when they are no longer making any money.
Of course, the key is to treat your restaurant as you would any other business. First and foremost, it must be profitable. Even in the initial phases of buying a business, you have the opportunity to make financially responsible choices.
Buying a Business that Makes Money
The first step you should take is to investigate the different restaurants you would like to purchase. For instance, if you are checking into a business for sale by owner, do not hesitate to question why it is on the market. If it is a restaurant franchise, think about its reputation and name recognition. If it is a private business, ask the owner why he or she is selling.
If the owner is happy with his or her company but ready to retire, you should keep their restaurant on your list for further research. In contrast, if the he or she is losing money, it only makes sense to move on. The restaurant may be a terrific concept and your first instinct might suggest that you are the one to transform it into a booming business. However, it is far wiser to resist this temptation. Again, remember that your primary goal is to make money.
Furthermore, take into account the property itself and all existing equipment. If you are somewhat limited in the amount of capital you can invest, avoid stores that require a lot of renovation. After all, there are more profitable ways to invest in your business.
Location, location, location
You have undoubtedly heard this phrase. Still, before you skim casually past this section, keep in mind that all types of businesses thrive better in strategically located areas. Restaurants are definitely no exception. In truth, they may even be the epitome of this principle.
Some very simple factors to consider are nearby venues. For example, it is always smart to open an eatery located near cinemas, pubs and shopping sites like department stores or malls. Most of all, high traffic areas like those visible from highways and busy streets are worthwhile locations. Also, if you are looking at businesses for sale in a highly metropolitan area, purchasing a restaurant with ample parking will put you a step ahead of many competitors. Of course, the better your location, the higher your initial cost. Once you evaluate how much you are able to spend and what it will afford, you should be able to reach a happy (financially sound) medium.
Moreover, if you already favor a certain type of restaurant, think about choosing an area that is conducive to its distinctive style. Thus, if your vision includes an open café, you should consider a business for sale in Sydney. Balmain, an artistic part of Sydney, is known for such cafés because tourists and residents alike enjoy the architecture (created in the 1800s and early 1900s) and other city sites.
On the other hand, if you are more interested in fine dining, you may like the City Centre. It is the commercial hub of Sydney and has a reputation for designer boutiques and extravagant department stores. Nevertheless, no matter which style you prefer, a place like Sydney is a wise choice. After all, the Los Angeles Times recently named this city one of the word’s most exciting places to eat.
And finally, take some time to research the demographics of your prospective area. For example, look at the average and median ages of tourists and locals in that area. Young people dine out more often. But, they spend less time and less money per visit than older people. A young couple may go out for dinner two or three times per week but they will not frequent expensive eateries. Instead, they are likely to visit a pizza place and skip dessert. Their parents, on the other hand, will go to an expensive steakhouse for their anniversary dinner and order everything from the appetizer to dessert (and accompanying dessert wine).
Dare to be Different
In this case, being different is not at all about appearance. While uniqueness and flare definitely turn heads, people go to restaurants to enjoy delicious foods and to be served. No matter how catchy your theme or atmosphere may be, if the food is mediocre and the service is unenthusiastic, people will try your eatery once, seldom (if ever) return and most of all, recommend it to no one.
However, you have good food and prompt, friendly service, your guests will be back (with their friends). In truth, the food does not even have to be distinctive. You can run a fairly basic establishment with traditional items and still please your guests. After all, people dine out because they do not want to prepare their own food. Moreover, they choose not to eat fast food when they want to relax and be served. Maybe they are a local family with parents who simply do not feel like cooking. Or, perhaps they are on a family vacation and looking forward to visiting a place they can not find at home.
Either way, your first job as a restaurant owner is to ensure that these very basic needs are met. Furthermore, you should strive to be different from your competition in such a way that you are better at providing good food and friendly service. There will always be occasional mistakes (the infamous server who drops spaghetti marinara on someone’s white blouse) and guests who can not be satisfied (the man who orders his steak medium rare when he really wanted it raw). As long as you treat every guest with dignity and do your best to meet (and exceed) expectations, you will quickly earn a positive reputation. Service with a smile pays off in the restaurant business.
Last but not least, even with the most traditional food, it is always smart to distinguish your restaurant from the competition. For instance, Overlanders Steakhouse, located in Alice Springs, specializes in rump branding. With a guest’s permission, staff members will brand jeans, belts or even hats with the famous STH. On the other hand, distinctive, delectable food is always an ideal way to gain business. Tetsuya’s, the most celebrated restaurant in Australia, offers delicious food that can not be found anywhere else. Where else can one find a dessert described as “early season berries with orange and Grand Marnier jelly and champagne ice cream?” No matter which direction you choose, the idea is to gain the best and most inexpensive advertising available, word of mouth.
Remember What You Already Know
If you have experience in the restaurant business, none of these ideas are entirely new. However, as you conduct further research into buying a business, it is easy to become overwhelmed by all the details and planning. Nonetheless, true success in buying a business in this highly competitive industry begins with these principles.
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