If you have decided to start up a restaurant cafe business for yourself, the next decision is to determine which business is right for you. Your business is more likely to be successful if there is a matching of your skills, experience, knowledge and interests with the business. Your business should build on your talents and be one in which you will remain enthusiastic, even when things look discouraging.
This is a form of planning that examines:
- a new business idea
- buying an existing business
- acquiring a franchise
with a view to establishing potential profitability. It can also be used to:
- assess the introduction of a new product/service
- consider expansion potential
- identify new markets so you can diversify
Starting up a new business
- What is the market demand and need for this product/service?
- Can a market be created?
- What is the level of competition?
- Is the market growing static or declining?
- What is the anticipated selling price?
- What are the costs involved
- to produce
- to operate
- to distribute
- to market?
What could the business yield in terms of profit and is that sufficient reward?
How much finance will be required and is it possible to acquire it?
What legal requirements will apply?
Is there any special experience or technical expertise required?
Buying an existing business
- Why do the existing owners wish to sell? Try to determine the real reason.
- Have you had experienced business friends look over the business?
- Have you looked at other similar businesses? How does this one compare?
- Have you assessed the competition?
- Is the business in a good location?
- Will the site, building and lease be suitable for your future plans?
- Have you discussed the conditions of the lease with your solicitor?
- Have you investigated all the relevant laws in your state pertaining to this kind of business?
- Have you been given the statutory forms and trading figures for the past three years?
- Have you seen documentary evidence to support the trading figures you have been shown?
- Have you checked out the business with suppliers, customers and staff?
- Have you checked the ownership and condition of the plant and equipment included in the sale?
- Have you checked the value of stock included in the sale?
- Is the figure asked for goodwill reasonable?
- Are you expected to take over any liabilities previously incurred?
- Will you need any additional equipment/fittings/renovations?
- Have you checked the availability of supplies and credit from existing supplies?
- Have you obtained a quote for insurance cover?
- Have you re-assessed the operating costs to reflect your way of running the business?
- Do you know how much money you need to borrow and is it available?
- Have you discussed all of the above with your accountant?
- Has he or she verified the accuracy of the figures you have been given?
Acquiring a franchise
- What is the franchisor’s reputation and history?
- How many franchises has the franchisor sold? Where are they located? How are they doing financially?
- What has been the failure rate and the reasons for failure in those franchises that have been unsuccessful?
- How do existing franchisees feel about the franchisor?
- What kinds of assistance will the franchisor provide, for how long and at what cost?
- Do you have a sample copy that you can show to your lawyer before you must sign it?
- What are all your basic rights and guarantees?
- What are all your basic duties and financial obligations?
- Do you have an exclusive and protected territory?
- How can you dispose of the franchise or terminate the agreement? How can the franchisor do so?
- Do you have the right to refuse to sell any new products or services offered by the franchisor in the future?
Product or Service
- Is the product or service protected by a patent, copyright, and liability insurance?
- Is what you will sell bought by many people and more than once?
- Who are your competitors? What are their prices and advantages?
- Will, what you sell be in demand three years from now? Five years from now?
- Does the product comply with local and state laws and regulations?
Above all else be sure to be able to understand what the contract states:
- The conditions under which the seller can terminate the contract (eg it might be for being late with sales report)
- The conditions under which the buyer can terminate the contract (eg if the buyer’s health deteriorates)
- The payment to the buyer when the contract is wound up for any reason (for example, does the buyer get the value of the goodwill he or she has built up for the outlet?)
Restaurant Cafe Startup Business
Starting and running your own restaurant cafe business is hard work and not without risks, but it is also an exciting and satisfying challenge and can give you a good income, providing you are prepared to invest a lot of time and energy into making it successful.
Want to know more about the restaurant cafe startup business?
For a very low investment, why not purchase a copy of
‘How to Keep Within the Law’ eBook
and ensure your long term success.
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