An interesting topic raised itself recently during the course of a conversation with a friend.
According to this friend, two of her friends have taken over a small specialty restaurant in the city. They took it over a few months ago, and are only now starting to get a bit of a return for their input. Initially, business died off as customers realized there had been a change in ownership. They paid rather a large amount of money for the business.
I wonder about the wisdom of continuing to run a business as it previously had run, as opposed to putting your own individual stamp on it, and changing the direction of the business.
Given that when you’ve bought the business, and you’ve paid, probably, quite a lot of money for the existing clientele, one could question whether it is indeed wise to leave it as it is, and settle in quietly.
But also you probably bought it because you have ideas of your own about what and how you want to the business to run/do. You probably have talents which lie in a particular direction, so obviously you would want your new business to reflect what you bought it for.
Therein lies your conundrum.
Obviously if you’ve bought it just for the actual physical premises, this is a moot point, and you just totally renovate and rename it – as in the case of Rockerfellers.
I see both sides as having validity, but am a great believer in the idea that you do something best if it’s something you genuinely love doing. If the best thing in your world, the thing that you absolutely love doing and are passionate about doing, is cooking the best schnitzel, then I believe you should forge ahead and run a Schnitzel House, serving up THE best schnitzels in the world.
If you love fishing, and believe you could transmit that love to others who would pay to also share that passion, start up your fishing business.
I hope the little city restaurant goes well for its owners.
Sunday, 22 June 2008
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3 comments:
My accountant said that many purchasers of existing business's tend to buy with an element of emotion. That is they pay far to much for what they see and do not look hard enough at the business model and financial 's .
If a business is built on "personality" then a change of ownership will most likely see a drop in trade - its that simple.
I see that Jeff Copping is lamenting the state of the industry as well and wants the Government to step in and do something to help it through the gloom and doom it finds its self in this winter. His booze sales are down and he is not happy.
We all know that the margin on food is now very small and the liquor sales are now the profit margin.
Well Jeff have you ever thought that maybe developers should be required to prove "a need exists" for another "food business" before receiving a planning permit.
It would be far less painful (and cheaper) than going broke.
There are a couple of new developments in the wind - which will only make it harder for existing business's to survive the down turn in the industry (8% this year and increasing - ABS).
Have a look at the number of business's on the market.
Increasing fuel cost is flowing though to food costs.
It's a great industry to be in but it is blood tough at the moment.
cool room
Its an interesting one this my dear Rita.
I purchased a business a few years back which included a fair whack of "Good will" on behalf of the owner which outweighed the more tangible assets of the business itself. But frankly I was'nt arsed. Position, position, position. Also I felt that the owner at the time was a poor operator with piss poor business sense, and because of the position was doing fine thankyou. Armed with a little more experience we took things our own way whilst maintaining the core of the business. In other words we just upped the quality of the delivery and service of the product. We upped turnover by 39% and profit by almost 51%.
The place is now back on the market, and not because of the current climate, but because I want to start a new project and I could do with the capital to help fund it and I am more happy growing the other project I also work in.
I wish the new potential owners well, but have already cautioned them on some of their more exuberant initiatives.
So now you know why I have been a bit silent of late, I'm just knackered with all this juggling and bloody cooking to boot, just see how old Gobbler feels over the coming months now he's back at it.
Cartouche.
Cool Room - I would really love to talk to you about this. Is it possible for you to email me on the Email Rita direct facility?
Cartouche - I HAVE indeed missed you over the last few months. What happened to my birthday celebration with you?
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