Business Overview

1000SF restaurant located in busy shopping center. Restaurant has class 1 hood. Business has been doing well even during COVID.

Financial

  • Asking Price: $180,000
  • Cash Flow: N/A
  • Gross Revenue: N/A
  • EBITDA: N/A
  • FF&E: N/A
  • Inventory: N/A
  • Inventory Included: N/A
  • Established: N/A

Why is the Current Owner Selling The Business?

There are all types of reasons why people decide to sell companies. Nevertheless, the real factor vs the one they tell you may be 2 completely different things. For instance, they might state "I have too many various responsibilities" or "I am retiring". For lots of sellers, these reasons stand. But also, for some, these might just be justifications to try to hide the reality of changing demographics, increased competition, current decrease in earnings, or an array of various other factors. This is why it is extremely important that you not rely entirely on a seller's word, however rather, use the vendor's answer in conjunction with your total due diligence. This will repaint an extra practical image of the business's present situation.

Existing Debts and Future Obligations

If the current company is in debt, which numerous companies are, then you will have reason to consider this when valuating/preparing your deal. Lots of companies take out loans with the purpose of covering points like inventory, payroll, accounts payable, so on and so forth. Keep in mind that occasionally this can suggest that revenue margins are too thin. Many organisations come under a revolving door of taking loans as a way to pay back other loans. Along with debts, there may also be future obligations to think about. There might be an outstanding lease on tools or the building where the business resides. The business might have existing agreements with vendors that need to be satisfied or may lead to fines if canceled early.

Understanding the Customer Base, Competition and Area Demographics

How do businesses in the area draw in new clients? Many times, businesses have repeat consumers, which form the core of their daily earnings. Specific factors such as brand-new competitors growing up around the area, roadway building, as well as employee turn over can impact repeat consumers as well as adversely influence future profits. One important thing to think about is the placement of the business. Is it in a highly trafficked shopping mall, or is it hidden from the main road? Obviously, the more individuals that see the business on a regular basis, the greater the chance to develop a returning consumer base. A last thought is the basic location demographics. Is the business situated in a largely populated city, or is it located on the outside border of town? How might the regional average home earnings impact future income prospects?