U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics > Business
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 06-19-2011, 08:47 PM
 
Location: Looks like I'm getting out "Valley On The Sun" Arizona
190 posts, read 344,064 times
Reputation: 224

Advertisements

Today I was approached by a restauranteur about purchasing his establishment. (the short of the long) We have small business that provides a fire preventive service to commercial kitchens, so I know many in the industry.
His initial asking price works out to 95% of his annual net . (What are your thoughts here?)

We'll talk more later this week and go over the books. I mentioned it to my better half and she gave me that "look".
Reply With Quote Quick reply to this message

 
Old 06-20-2011, 11:06 AM
 
Location: The Triad (NC)
26,844 posts, read 57,851,863 times
Reputation: 29235
Quote:
Originally Posted by Woundedknee View Post
We have small business that provides a fire preventive service to commercial kitchens, so I know many in the industry.
Then you *know* which is the right side of the industry to be in.

Quote:
I mentioned it to my better half and she gave me that "look".
And next comes the kick in the pants.
Reply With Quote Quick reply to this message
 
Old 06-20-2011, 02:22 PM
 
Location: Looks like I'm getting out "Valley On The Sun" Arizona
190 posts, read 344,064 times
Reputation: 224
Quote:
Originally Posted by MrRational View Post
Then you *know* which is the right side of the industry to be in.
You would think that wouldn't you?
Reply With Quote Quick reply to this message
 
Old 06-20-2011, 05:39 PM
 
10,869 posts, read 41,139,178 times
Reputation: 14009
Is there any hint here that Wounded Knee knows anything about the restaurant business?

Absent training and experience in this business, you're just setting yourself up to throw away a lot of money ... even if the seller gave you the keys and walked away from the place.

95% of the annual net may ... or may not ... be a fair price. You need an accountant familiar with this industry to review the books and someone to review the operation that knows the restaurant business who can realistically assess what it is you're buying.

You do realize that this business will take over your time?
Reply With Quote Quick reply to this message
 
Old 06-20-2011, 08:06 PM
 
Location: Looks like I'm getting out "Valley On The Sun" Arizona
190 posts, read 344,064 times
Reputation: 224
I've owned a restaurant in the past (it's where I meet my better half) I had it for about 4yrs then sold.
Reply With Quote Quick reply to this message
 
Old 06-20-2011, 08:39 PM
 
Location: Somewhere in northern Alabama
16,845 posts, read 51,301,408 times
Reputation: 27662
Obviously not enough info. 95% of net is different between $20K and $500K. Net before he pays himself or after a salary. Location? Changes? You know the drill.
Reply With Quote Quick reply to this message
 
Old 06-20-2011, 09:43 PM
 
Location: Looks like I'm getting out "Valley On The Sun" Arizona
190 posts, read 344,064 times
Reputation: 224
Net comes out 370K this derived after expenses and all salaries. He only open 6 days a week for 5hrs a day (lunch) highly desirable central corridor Phoenix. Changes would probably be an addition of breakfast right off.
Reply With Quote Quick reply to this message
 
Old 06-21-2011, 06:35 AM
 
10,139 posts, read 22,409,188 times
Reputation: 8239
Try again on your numbers. They make no sense so far. The average restaurant, with liquor, is lucky to profit 4-10% of gross sales. You quote $370K?
Reply With Quote Quick reply to this message
 
Old 06-21-2011, 08:38 AM
 
Location: Looks like I'm getting out "Valley On The Sun" Arizona
190 posts, read 344,064 times
Reputation: 224
You have a very valid point we'll be going over the books probably Thursday.
Reply With Quote Quick reply to this message
 
Old 06-21-2011, 08:08 PM
 
28,906 posts, read 45,202,743 times
Reputation: 45815
I'd call a restaurant consultant. There are guys out there who are experts on restaurant valuation who will let you know what the right asking price should be and what questions to ask.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics > Business
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top