Before I was a Realtor I was a longtime restaurant owner. I have owned four successful restaurants, well actually three because one failed miserably, that's a story for another time! Food Service is in my blood, so I was so ecstatic this week when a long time friend asked me to find a restaurant for him to buy! This is right up my alley and I am so excited to help. He chose me because I can also help him decide if a location is going to be feasible or not. There are a dozen or so reasons restaurants fail and I will share reasons and tips if you ever need the info!
I will post one a day, here we go......
Undercapitalization This is perhaps the most common mistake for new restaurant owners. Underestimating a restaurant’s start up costs can result in bankruptcy. Having a great concept doesn’t prevent you from running out of money. It is always better to overestimate your costs then underestimate. Common problems during start up may include construction delays or changes demanded by building inspectors. 
To cover such unexpected problems, money should be set aside for working capital which should cover up to one year of rent. In addition, contingency money should also be set aside for any other unexpected problems that may arise. The norm is to set aside 10%-15% of the total investment required for contingency. A good practice is to remain conservative in forecasting your sales and the amount of investment required. Lower your sales forecast and slightly increase the amount of money required.
Hope that was a good start!
Part Two From Restaurant Owner to Realtor In Attleboro, Mass
Part Three Existing Restaurant or Vanilla Box
Part Four Searching for a Restaurant Location....
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