Starting and building a company from the ground up requires a lot: lots of time, lots of energy, lots of money, and lots of risk. Sure, it’s exciting to start from scratch but it can also be exciting and rewarding to take over an existing business and realise its full potential.
You’ve heard the smart play is buying an existing business but you’re not sure what. Have you thought about hospitality? Every country in the world has a hospitality industry and as long as there are people and food there will be a hospitality industry. Whether it is a café, fast food franchise, take out joint, a restaurant or even a food truck there’s plenty of opportunity to buy an established business that can start generating you a steady income from day one.
Getting into hospitality
Purchasing an established business isn’t a guaranteed money maker but it is a lower risk long-term investment with many benefits including:
- A full and proven history of generating cash flow and profits – including current performance
- An established customer base and brand loyalty
- Existing reputation and community standing
- Comes with knowledgeable and experienced staff
- Will already be operating with a proven and successful business model
- It is easier to get financing for a profit-generating business than capital for a start-up
The best thing about hospitality is how well primed for diversification it is. If you have the vision and desire to capitalise on new trends and evolving customer requirements there are big gains to be had from reinventing or tweaking an established eatery.
Understanding the industry
You don’t need to be an expert in hospitality in order to buy and run a successful business in the industry but it does help to know a few basics and go in with your eyes wide open.
Hospitality businesses are a great investment for many reasons. They’re a good source of steady revenue, they’re often already ideally located for their area and it’s rare to be short on people looking for a job. However, these strengths can also be weaknesses if you go into the industry unprepared.
It’s important to ensure the location fits where you want to take the business and to be properly financed. Apart from the cost of purchasing the business you’ll need to have the money to cover stock, wages, strategic manoeuvres and marketing the relaunched business.
Also, whilst you’ll never be short on people applying to work in hospitality you’ll need to be prepared for a high turnover of staff. There’s normal seasonal attrition to deal with so a great tip is to have a mix of veterans and newbies who can be trained as apprentices.
Purchasing an existing hospitality business isn’t for everyone and it takes a certain kind of drive and passion to be truly successful. Knowledge of the industry is helpful but more so is the willingness to reach out to others for mentorship and guidance. Too much obstinate independence and determination to not take advice from those who might know better, even if they’re your employees, does not a successful hospitality business owner make.
Running a hospitality business is time-consuming and you’ll need to have the right attitude. Time-management, people skills, the ability to cope under pressure and a fierce, unshakeable commitment to exemplary customer service are all paramount to success in hospitality.
If that sounds like you your next step is to appoint an acquisition team to help you with your due diligence from sales forecasts to long-term viability. With specialist brokers here at Redmako Business Sales on your side buying a hospitality business can be a simple process. We’ll give you all the guidance you need to find and acquire the right hospitality business and open up a world of possibility and opportunity in an exciting and rewarding industry.