MidwestLandlord
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- Dec 6, 2016
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-the owner wants to sell it and its real estate included (huge lot with car park all around the side and rear).
What's the lot worth by itself?
$100,000 x 4.5 (being generous) is $450,000 value for that business.
he and his uncle have been chained to it full time for years and want to retire.
How many hours are they working combined per week? 100? 120? 140?
How many people would it take to replace them?
It turns a steady 100k profit each year.
Gross revenue is? If it is less than $1.2 million, I'd be very skeptical of their books. Is the food the only thing that got cooked?
-there is a 500 unit apartment building being build across the road two blocks down that will increase the customer base a lot, im also thinking i could add deliveries and add more income.
While this 500 unit apartment brings potential, it does not guarantee sales. HOW would the restaurant serve these people? Delivery? Do you have the labor for that?
Inside service? How many does it seat? Is it a full house at rush times? (typically 6-8am...11-2...5-7pm)
If it is a full house, could you honestly expect to increase volume? How many employee hours does he spend? How much revenue does each employee generate? Find that number (revenue divided by hours), divide that into the expected revenue increase, and that's how many more humans you would need to run the increased volume.
Is anyone here in the restaurant business? I am trying to figure out how hard it will be to take over and if i can actually eventually be hands off and if i am missing anything here. all opinions are appreciated and happy new year to everyone
Yes, I'm an ex-restaurant owner (two of them)
So assume the $100k profit is correct. You need TWO people to cover the work of the old owners. (are you aware of the restrictions regarding salaried employees? So you can't really have more than one salaried person in a place like this)
Hourly assistant manager: $30,000 <----Lots of over-time here...expensive
Manager: $55,000 - $100,000
Eats into profit FAST.
Edit:
Who does the cooking now?
Edit #2:
Do you want to hear about the time my restaurant gave a 6 year old girl food poisoning and almost killed her? Or should we skip to the lawsuit part of that story? I in turn had to sue my supplier because it was there fault for not following PHF regulations. On the bright side, I found a wonderful attorney who has represented me ever since and is now a really close friend, so that's good I guess. (and the kid was fine thank God)
Restaurants man ...
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