Owning and operating a restaurant is a dream for many restaurateurs. It may be your dream too! The ability to design and create your own space, add your own personal touch to the decor, serve your favorite food and drinks, be your own boss and reap the rewards of your work... After all, why not give it a try?
But taking over a restaurant isn't always as easy as it sounds, especially if it's your first time and you're taking over with no experience. Fortunately, we've clearly outlined for you all the steps to take (and, just as importantly, the things to avoid) to make your life easier when taking over a restaurant!
1. Look at the business
What is the goodwill of a restaurant?
The goodwill of a restaurant is made up of everything that is tangible. This includes furniture, point of sale equipment and kitchen equipment. It also includes legal documents such as licenses, personnel files, leases and financial documents.
However, a restaurant is not just what is physically attached to your four walls. You also take over all the non-physical assets associated with the business. These include the restaurant's name and brand, the customer base, the current reputation of the establishment, your local competitors and most importantly, your location. These are highly valuable assets but also carry more risk for your future restaurant.
It is therefore important to understand the current state of the restaurant as a whole before deciding to take over!
Why is goodwill so important?
A thorough analysis of the business of your future restaurant is essential to ensure its future. Indeed, if you take over a restaurant that has a very bad reputation for example, it can be complicated from the beginning to attract new customers or hire staff.
On the other hand, if your restaurant is in a great location, the equipment is in good condition, and your customers are enjoying their experience, this can be a great opportunity. Of course, don't hesitate to make additional improvements to ensure your long-term success!
To go further: How does the purchase of a business work?
2. Take inventory of equipment and materials
Assess the condition of the restaurant
You must ensure that the equipment, furniture and the building as a whole are in a condition that will allow you to launch your business efficiently and successfully:
- Does the restaurant need renovation?
- Are the facilities up to standard and adapted to your needs?
- Is the kitchen working properly and safely?
- Has the fire alarm system been checked?
By doing this early on, you can budget for future investments, upgrades or renovations. This allows you to understand what needs to be improved and identify potential equipment you need to purchase to get your business organized from the start.
This is clearly one of the most important points for your restaurant takeover!
Improve the existing and think digital
Starting your restaurant venture with outdated or even broken equipment can only lead to more stress and maintenance costs. To be ready from day one, make sure your equipment is functional. If it's not, anticipate delays in purchasing, delivering and installing new equipment.
And to put all the chances on your side when you open your establishment, don't neglect the role that digital technology can play.
Today, there are complete ecosystems that are easy to set up to streamline your organization, boost your sales and meet your customers' expectations:
- kiosks, online orders, QR code for order taking,
- Touch screen cash register for the collection of cash,
- production screen in the kitchen for the preparation of meals.
Not comfortable with digital? Get advice!
👉 Contact an Innovorder expert
3. Study the location and competition of the restaurant
The location of a restaurant is essential because most of the time it plays an important role in the attractiveness and therefore the success of a business.
You must therefore analyze factors such as:
- Accessibility: Are there roads to get there easily? Is there a parking lot? Or public transportation nearby?
- The neighborhood: Is it located in a downtown area? In a quiet residential area?
- Local activity: Are there other local businesses nearby? Schools, stores, offices? Upcoming roadwork? Every detail counts!
If the restaurant you are considering taking over is located on a small street that no one uses, this may be the reason why it is for sale...
A location can also be influenced by the quantity and quality of competitors. For example, areas with a lot of restaurants usually indicate a high level of foot traffic. But this is bad news because there is always the risk that passers-by will go directly to your competitors. So be careful if your offer does not stand out!
4. Get to know your customers
Knowing and understanding your customers is an essential part of running a restaurant. Does your restaurant concept match the desires and habits of the neighborhood and its residents? If not, it may not be the best choice for you.
For example, if your establishment is a popular place for students because it is located near a university, drastically changing the offering to offer expensive food could drive away your core clientele. On the contrary, with this information already in mind, you can build on your existing popularity to create targeted marketing campaigns and loyalty programs that will only increase your foot traffic!
Our advice: take the time to discover the neighborhood, the habits of the residents and to talk to the shopkeepers and your future neighbors because this is your first catchment area and the people who will probably be your regular customers.
5. Prepare your commercial strategy and your offer
An effective restaurant takeover always begins with a solid business plan. If you are seeking financial assistance to help you with your takeover, you must prove that your plan and vision not only make good business sense, but that they also meet strict restaurant safety regulations.
Analyze the strengths and weaknesses of the current facility and see how you can make improvements. By studying the restaurant's strategy, you can identify its strengths and build on them to create new opportunities.
For example, you may have noticed that the old restaurant was not present on social networks, such as Facebook, and did not offer online ordering. Given the considerable business opportunities offered by the Internet, it is essential to think about a digital strategy.
Also, consider the financial revenues of the previous owner over the last 3-5 years. This allows you to calculate your potential earnings, identify financial trends and create budgets that you can then use for renovations and development of your restaurant.
Business plans are extremely detailed and can take a lot of effort, but if done right, they create a roadmap to success from the start!
To go further: How to make a business plan for your restaurant?
6. Meet your future strike team
When you take over a restaurant, you also inherit a team.
It is essential that you meet your future employees to get to know them and understand how they work. As in any takeover, some people may start out on their own, but you will also find that others stand out and share your vision!
An analysis of their individual and collective performance is essential to find the best possible organization.
While some team members are natural leaders who can help you train less experienced ones, others have strong marketing skills that can be useful in promoting your facility. It's up to you to bring out the best in everyone!
It is also important in your analysis to identify key business periods throughout the year. You will likely need staff during busier periods than others, which means you need to plan your recruiting periods in advance so that you are not overwhelmed on the day.
👉 9 tips for finding restaurant staff
7. Analyze business and financial performance
The evaluation of the profitability is a decisive factor in a takeover.
Taking over a restaurant if the operating costs are too high and the sales too low is strongly discouraged.
Here are some factors to consider when reviewing the former owner's financial performance:
- Average weekly, monthly and annual sales
- Average expenditure per person
- Gross profit from food and beverages
- Average number of meals served
- Costs (personnel costs, rent, marketing, maintenance costs, gas, electricity, taxes, etc.)
A final factor to consider is why the previous owner put the restaurant up for sale. Take the time to ask the right questions and get as accurate an idea as possible of the business and its management.
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You now have all the cards in hand to take the plunge!
As we have seen, many elements must be taken into consideration for a successful takeover project! From the goodwill to the location, through the equipment, mastering all these aspects will allow you to put all the chances on your side to start on the right track and last in time!
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You want to take over a restaurant and modernize its equipment?
Contact an Innovorder consultant and discover how digital technology will boost your turnover by reaching more customers and improving your productivity in the dining room and in the kitchen!
