Restaurant Buyers:  What to Do After Buying a Restaurant

Posted by Robin Gagnon on Dec 14, 2023 5:03:26 PM


We devoted an entire chapter in our award-winning book, Appetite for Acquisition, to a discussion of the top things a new restaurant owner should do after closing day. We’re taking that advice and building it into an article that’s easy to save or pass along.

Since you have succeeded at the tough goal of buying a restaurant, it is now important to secure the transition and set the stage for long-term success. After all, at some point in the future, you may be looking at an exit strategy of your own. You want to protect that investment. Here are the other nine items you should take care of after buying a restaurant. Our best advice is to do these essential things immediately but wait at least 100 days to know the business before changing the menu or operating hours or anything drastically. Here’s what you should do.

Congratulate Yourself
The very first thing on your list of ten things to do after buying a restaurant is congratulate yourself. You have taken a huge step. A survey sited by Yahoo Finance found that 2 in 5 people planned to start a business in 2022 but most don’t move forward. They are hampered by excuses like not enough money (43.58%), not sure of what type of business to start (15.76%) or not enough time (12.94%). You blew past all those excuses and did it. Be proud of your accomplishment. You found a restaurant for sale, persevered through due diligence, potentially lending, and more to end at the closing table. Take a moment to congratulate yourself. That’s item one on the list.

Lock Up the Business and Key Employees
You will want to secure key aspects of the business including the physical security, the social media accounts, website, key employees, and other items. Overall, lock things down. It seems simple but despite the excitement of closing, remember to change the keys, the alarm codes, social media passwords, website passwords and more. You don’t want an old employee with access from two years ago logging into your business.

You also need to lock down key employees. The seasoned employees may be essential to the business and its cash flow. Understand the dynamics of your new team before making any significant changes. Evaluate your staff, their skills, and their loyalty. Avoid making abrupt changes unless absolutely necessary to maintain a stable transition. The goal here is to retain valuable employees in the transition and avoid alienating staff members who are key to operations. The only caveat to this is anyone who is doing something that puts the business at risk such as serving underage alcohol or embezzling funds.

Secure your Sales and Create a Revenue Pipeline with Marketing
Make sure you understand the sales and promotional cadence of the prior operator. If he did an annual Crawfish Festival, be sure it’s on the books to secure that revenue stream. Understand every event and every customer that contributed significantly to sales and be sure you have a blueprint to keep those occurring.

Understand the posting cadence on social media. Which channels were they using? If the prior owner was a social media whiz and you’re a luddite, hire external resources to be sure you can keep revenue levels intact. Above all, make sure your personal identity is tied to the restaurant and talk to everyone you know about visiting you in the store.

Ensure your website is functional, user-friendly, and up to date. Your online presence also includes any social media accounts that may already exist for the restaurant, or any new accounts that you will make. These should be linked to on your website, and your website should be linked on your social media profiles.

Third party delivery is an important part of the business and funnels from online platforms and apps so be sure these transfer over to you along with all email addresses and customer contact information.

Exercise Strong Control over Costs
You own a business now, and it will take more than high volume sales to make it a profitable one. In addition to implementing strategies that increase cash flow, pay attention to food, labor, and other operational costs. For the long-term health of your business, keep your books clean and your financials updated.

When it comes to food costs, understand who is ordering inventory. In the kitchen, make sure your cooks are using the established recipe portions and prepping the correct amount of food each day. Alcohol costs should be tracked on a separate inventory. Monitoring these items will help prevent your food costs from spiraling out of control and hurting your bottom line.

Download the Restaurant Cost Calculator

Creating an opening and closing checklist will help you control waste and energy costs. These checklists should outline everything an employee or manager should do during their shift so that operations continue smoothly even when the lunch rush comes in. Record these processes and more in an operation manual so that you know the business can operate without you.

Secure Your Regulatory Compliance
Stay informed of your state’s labor laws, food service regulations, alcohol service laws, and other relevant regulations to avoid legal issues. The federal government requires you to post the Equal Pay for Equal work Act, Equal Employment Opportunity Act, and Fair Labor Standards Act for labor compliance. Make sure your employees (and you) have ServSafe accreditation required by the state for food service handlers and that your food service permit is in order along with all health inspections. You don’t want to be closed down because you weren’t aware of a rule. If you are buying a restaurant using a Certified Restaurant Broker like those at We Sell Restaurants, they will have checklists for you to ensure these elements are handled prior to closing.

Establish Financial Management
Make sure you are tracking costs and reporting them monthly. Keeping clean books is essential to restaurant ownership. Outsource your bookkeeping and payroll so that you can focus on the restaurant’s day-to-day operations. Monthly Profit & Loss statements give you a snapshot of the restaurant’s health and can point to areas that need more attention.

Secure the Business by Maintaining Status Quo
You probably have new ideas for the restaurant that you are itching to try. Avoid making any drastic changes during the first 100 days of your ownership. Customers will need time to adjust to a new owner and potentially a new atmosphere. Instead, slowly introduce your ideas to customers. For example, test one new entrée before completely changing the menu. This also applies to the layout of the restaurant. Don’t move or remove seating at the risk of losing sales.

The smartest play is to hold off on your changes unless you are certain those changes will add sales and help the bottom line. While it’s important to not make any major changes in the first 100 days, it absolutely is OK to upgrade the space for customers by cleaning the business. Everything from the floors to the ceiling tiles should be cleaned. This means spending some time mopping, washing windows, tidying up behind the bar, adding a fresh coat of paint, installing new lights and more. Customers will feel the difference and your restaurant will have a refreshed life.

Secure the Ongoing Maintenance of the Restaurant
Make sure you have maintenance contracts in place for all major systems. This includes

  • Fire Systems
  • HVAC contract and inspection
  • Kitchen Equipment
  • Plumber and Electrician
  • Hood Inspection
  • Grease Trap Cleanout
  • Pest Control
  • POS Provider

The last thing you want is to go into a holiday weekend with a failure on one of these items that could lead to thousands in lost sales. A simple maintenance agreement may cost you a few hundred dollars, but it pays off when you need a supplier in a hurry to handle an air conditioning unit on the blink or a kitchen sink that needs servicing.

Secure Your Exposure
It goes without saying that you should have the biggest and brightest signage available under the local sign ordinance. Invest in new or upgraded lighting to stand out from the street. Don’t forget window signage as well.

In conclusion, purchasing a restaurant is just the beginning of a challenging yet rewarding journey. Celebrate your accomplishment, but also prepare for the road ahead. Securing your business includes all these recommendations. These are critical steps to lay a firm foundation for success. Don’t forget to maintain the status quo while slowly integrating your ideas to familiarize customers with the new management. By following these guidelines, you position yourself not just for immediate success, but for future growth as well.

Download the Free Guide to Buying a Restaurant

Robin slug photoRobin Gagnon, Certified Restaurant Broker®, MBA, CBI, CFEis the co-founder of We Sell Restaurants, a brand that has carved an unparalleled niche in the industry as the nation's leading and only business broker franchise focused on restaurants. Under Robin’s leadership, We Sell Restaurants has grown to 45 states where it dominates the restaurant for sale marketplace, including franchise resales, delivering on the founder’s vision to Sell More Restaurants Than Anyone Else. We Sell Restaurants was named one of the most influential suppliers and vendors in the country by Nation’s Restaurant News and has earned a position on INC 5000’s list of fastest growing privately held companies. Franchisees of We Sell Restaurants surveyed by Franchise Business Review placed it 25th in the nation in franchisee satisfaction.

Robin is the Chair of the Women’s Franchise Committee of IFA and is a member of the IFA Board of Directors. She is also an MBA and Certified Franchise Executive (CFE) and has her CBI (Certified Business Intermediary) designation from the International Business Brokers Association. She co-authored Appetite for Acquisition, a small business book award winner in 2012 and contributes frequently to industry press appearing in Forbes, QSR, Modern Restaurant Management, Franchise Update, and others. She has appeared on The TODAY Show as a restaurant expert and Entrepreneur Magazine has named her to their list of the “Top Influential Women in Franchising.”

Topics: Buying a Restaurant

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