Questions to ask before purchasing an existing sports bar/restaurant? -

I am currently reviewing an option to buy an existing sports bar/restaurant? What are some questions outside of the obvious to consider when I meet with the owners?I am aware of questions about payroll, cost of good sold, liquor license, maintenance contracts, equipment, and leasing arrangement? Are there any other imperative questions that one should consider being new to this industry?Thank you!

Hi thereWhat you have to keep in mind is that the owners is only selling you the business, not the goodwill. Now that means that they may have some very regular clients whom frequent the bar/restaurant on a regular basis, this may change as soon as they leave, clients go with them should they decide to open a new establishment or just stay away and visit the competition down the road. You have to be sure that you do have the personality and confidence to attract new customers and keep the regulars. The most important question I would say ask the owners if they do intent to retire or move out of the area because they may want to open another establishment two blocks from you. There is a clause that you can work into the buyers agreement which will prevent them from doing that it is called restriction of trade and you can stipulate a radius which would prevent them from opening a new place down the road. Ask them why they are selling if it is not for health or retiring reasons as this might give you a clue, there may be new developments in the area that you are not aware of and this might influence your business ie new road or the shutting of a road or a new development ie shopping centre which could have bars and restaurants and therefore will stiffen your competition. Also have a look at their accounts or books this will also be a good indicator as to why they are selling as for at least 5 years financial statements and compare them then year on year.Hope this helpedRegardsElize

there are many accounting ratios that you probably are unaware of which can prove the financial soundness of a business. You can learn this by carefully going over the books preferably with an accountant (money well spent) or if you can t afford one go to your local college book store and buy a used accounting book

My suggestion to you (and maybe you ve done this) is to spend time in the bar. See how busy it is on various nights of the week. And get to know some of the customers. What do they like, what would they change? That might get you some additional insite as to the general condition of the place and changes that might need to be made (which may cost some additional money).