Explore six reasons why buying a restaurant is the business investment you need to make this year. After all, it’s much easier than starting one from scratch.
If you’re looking to buy a business, it’s natural to be unsure which will give you the best return on investment. With hospitality businesses experiencing huge growth, however, now’s a great time to consider purchasing a restaurant.
By buying an existing restaurant, you avoid many of the overheads that come with setting up from scratch – plus you inherit an existing customer base. With that in mind, let’s explore six reasons why a restaurant makes a great business investment and how to find the right one for your needs.
- A timeless business model
A common trap that budding business owners fall into is buying a business in an industry that’s trendy or niche. While that trend might seem viable at the time of purchase, there’s a risk of it dwindling out long-term and leaving you with a limited customer base.
Even throughout times of recession, customers flock to restaurants as a way to de-stress, celebrate milestones, or simply enjoy delicious food. In fact, even in recent economic difficulties, 28% of people are actually eating out more than they were six months ago.
- No delay in opening
When you buy a space and start a restaurant from scratch, there will be up to 6 months of time income-free, during which you have to decorate, decide on a menu, buy cookers, and start marketing.
When you buy an existing restaurant, the restaurant itself, its amenities, and even its clientele are already in place. That way, there’s almost no delay in opening and you can start earning revenue almost immediately.
- Opportunity for high-profit margins
Naturally, if you’re specialising in Waygu steak, you probably won’t make huge margins on each dish because the food itself is so expensive to procure. In general, however, it’s relatively easy to operate high-profit margins in a restaurant thanks to some low-cost items.
Elegant presentation goes a long way, so with a few tricks, you can transform a veggie salad dish that didn’t cost too much to make into one of the priciest dishes on your menu. Bulking out meals with low-cost pulses and legumes can help too.
Likewise, the profit margin on a cup of coffee is around 70-80%, so by encouraging added extras like a cappuccino at the end of a meal, you can maximise your revenue.
- Easy to find staff
While working in hospitality requires plenty of soft skills and a certain level of experience, there are no formal qualifications or education needed for the most part. As a result, it’s much easier to find workers in hospitality than an alternative industry like engineering.
- Organic footfall
Niche businesses need an A-grade marketing strategy to get customers through the door. Imagine a specialist store for enthusiasts of a certain TV show. They’re unlikely to attract any member of the public walking past, so they have to work extra hard to make sure their target audience knows where they are.
With a restaurant, you’re guaranteed some level of organic footfall from people walking or driving past with a rumbling tummy, which reduces your marketing costs and promises a steady flow of customers.
- Lower initial costs
When you’re buying an existing restaurant, you save money on many of the typical costs associated with starting from scratch. Plus, because many of the restaurants currently on the market are being sold so their owners can retire, you might benefit from a lower price than usual.
From elegant fine-dining restaurants to friendly local eateries or global food joints, there are plenty of restaurant options on the market if a hospitality place is your next purchase. And with demands for eating out remaining high, this thriving industry is well worth your investment.
By searching online, you can find Italian restaurants for sale and more, to get started on your dream of becoming a thriving restauranteur.