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Anyone know the best place to find an investor to help with the purchase of a very successful Ma. restaurant with sales in excess of 1.5 million currently in it's third year of operation with huge potential for increasing sales? I am the Chef, and have been since opening and am looking to buy out my boss.
Hank,
Acquiring capital for a restaurant can be a challenge. I doubt that any "professional" investors will be interested, so you will probably have to find some "private investors" who will support you. Since there is no "list' of these types and they don't belong to angel groups, you'll need to follow a process to reach out to them.
To begin, I'd suggest taking steps to make everything as attractive as possible.
If you would like to discuss your specific situation, feel free to send me a Pm or contact me directly.
Hank,
Robert is correct, and I would also like to ask a couple of questions:
§ Is your boss looking to sell?
§ Is your boss aware of your interest in buying the restaurant?
The answers to these questions will help determine your next steps. However, that being said, you will definitely need to put together a business plan that demonstrates how and why there is a huge potential for increasing sales as you indicate.
Feel free to email me if you have any other questions.
Ed Baloga, CPA / MBA
Principal CFO
Baloga Associates
ebaloga@baloga-associates.com
www.twitter.com/edbaloga
Thanks for the responses. My boss has been telling me he wants me to buy the restaurant eventually, but wont give me a price or a time frame. He's in his sixties, so I think it will be soon. I'm thinking of putting together funding and making him an offer. The sales have been increasing consistently since we opened, and I haven't tapped into other potential revenue streams.
Unfortunately, many business owners do not have a well defined exit strategy, i.e., some outside influence ends up dictating when they leave the business.
You indicate that he hasn't talked to you about a price or a time frame, it sounds as if he might not be emotionally ready to leave the business or financially ready for that matter (he might not be sure what he needs financially to retire comfortably).
My only suggestion would be to continue talking to him and try to determine why he is reluctant to talk to you about specifics.
Feel free to contact me should you want to bounce an idea off of me.
Thanks for the responses. My boss has been telling me he wants me to buy the restaurant eventually, but wont give me a price or a time frame. He's in his sixties, so I think it will be soon. I'm thinking of putting together funding and making him an offer. The sales have been increasing consistently since we opened, and I haven't tapped into other potential revenue streams.
Two suggestions:
Approach the owner and ask him to hold the note. You provide 10% down and finance the rest with him. Amortize it over 20 years with a balloon payment in 5 years. Then, you use the business to pay the note and in five years when the balloon is due, you will have more financing options.
Or, get out in your community - find lawyers, doctors, CPAs, other business owners. Ask them to invest in you. Raise the money and buy the business. Look into the SEC's Reg D options.
As a side note, if your credit is strong and you can show solid cash flow - you might look into a SBA guaranteed loans (OK that is three suggestions). But, a SBA loan may be the hardest and most expensive option.
I represent Compound Profit. Compound Profit provides working capital to small and medium
sized businesses. We have EXCELLENT programs for restaurants and hotels, especially in terms of Unsecured Business Financing, Equipment Leasing and Merchant Advance and Processing/Credit Card Programs.
We work with established businesses and start ups. it's been our experience that banks
aren't lending as generously 9if at all) to restaurants as they have in the past.
Feel free to email me directly about your proposal and I will see how CProfit can help.
Keith
It's hard to find outside restaurant funding because these types of businesses have such a high failure rate. I know of one restaurant just down the street that has already changed hands 3 time in 18months. The new owners (original owners) are now trying to decide what to with the property. But, likewise, a restaurant three miles away has changed hands three times in three years. The new owners are making a killing off the property.
But, they did a lot of research into the business before they bought it. This involved more than just talking to the current owner. I suggest you do the same.
I know an investor/Loan lender. you can contact him on bobcolly22@aol.com
Regards,
Jello
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