I understand this is a loaded question but what are some basics and rule of thumb to get me start to the right direction?
- Is it similiar to real estate as in determine the market, trends etc… about the business and come up with a methodical captilization rate or % ROI. Then just divide the restarant net income by it?? I bet it is more complicate than this… let me know… Thanks…
I just bought one… Best way is to get an accurate income (their may be money sliding by to keep the taxes down). Accurate costs is also needed, food mainly but don’t forget payroll, water, electricity, taxes and insurance… The rest is pretty much like any real estate. Is the area growing?… Restaurants are also seaonal, this month may provide a significant income but december may lose money, look at the year not the month, sometimes it helps to look at the last 5 years, which can help you predict the next five…
A huge question is… If it is doing so weel why sell it…. The restaurant business is a trench fight and buying an establish money maker is the way to go
You would be better off staking out the place for a few days and counting the number of paying customers than taking the seller’s word for it.
References :
I just bought one… Best way is to get an accurate income (their may be money sliding by to keep the taxes down). Accurate costs is also needed, food mainly but don’t forget payroll, water, electricity, taxes and insurance… The rest is pretty much like any real estate. Is the area growing?… Restaurants are also seaonal, this month may provide a significant income but december may lose money, look at the year not the month, sometimes it helps to look at the last 5 years, which can help you predict the next five…
A huge question is… If it is doing so weel why sell it…. The restaurant business is a trench fight and buying an establish money maker is the way to go
References :