Report in MBA 600 Advance Food and Beverage Service
Prepared by: Maryam Gela A. Garcellano
MBA THM 1 LEARNING OBJECTIVES • Determine the ideal site for your restaurant.
• Identify and discuss the factors to be considered in
selecting a perfect location.
• State the pros and cons of buying versus leasing for
your restaurant.
• Discuss the evaluation an existing restaurant
operation. HOW TO BUILD A SUCCESSFUL RESTAURANT
• the CONCEPT (market trends for menu)
• SITE SELECTION (location)
• The FEASIBILITY STUDY( later business plan)
IDEAL RESTAURANT LOCATION
a.The concept should fit the Location.
b.The Location match the concept.
c.The Location should appeal to the Target
Market. ENVIRONMENTAL ANALYSIS FOR YOUR RESTAURANT • Target Market ENVIRONMENTAL ANALYSIS FOR YOUR RESTAURANT • Labor Cost and the Minimum Wage ENVIRONMENTAL ANALYSIS FOR YOUR RESTAURANT • Access ENVIRONMENTAL ANALYSIS FOR YOUR RESTAURANT • Proximity to Suppliers ENVIRONMENTAL ANALYSIS FOR YOUR RESTAURANT • Competition ENVIRONMENTAL ANALYSIS FOR YOUR RESTAURANT • Visibility ENVIRONMENTAL ANALYSIS FOR YOUR RESTAURANT • Size Matters for Future Growth ENVIRONMENTAL ANALYSIS FOR YOUR RESTAURANT • Health Regulations and Zoning ENVIRONMENTAL ANALYSIS FOR YOUR RESTAURANT • Safety/Crimes Rates ENVIRONMENTAL ANALYSIS FOR YOUR RESTAURANT • Cost of the building WHAT IS BUYING?
• to acquire possession, ownership, or
rights to the use or services of by payment especially of money ADVANTAGE BUYING A PROPERTY
• With fixed rate mortgage, your monthly
repayments will be predictable. ADVANTAGE BUYING A PROPERTY
• You will gain equity in your property and
over time, your property may double or even triple in value. ADVANTAGE BUYING A PROPERTY
• Your mortgage repayment is likely to be
similar to or less than a rental payment on the same property ADVANTAGE BUYING A PROPERTY
• you have control over what alterations you
want to make to your property ADVANTAGE
BUYING A PROPERTY
• you may be able to sublet any free space,
reducing your monthly repayments and allowing you to generate extra income ADVANTAGE
BUYING A PROPERTY
• You’re in charge and don’t have to deal
with the potential hassles of a landlord or property manager. ADVANTAGE
BUYING A PROPERTY
• interest payments on a commercial
mortgage are tax-deductible ADVANTAGE BUYING A PROPERTY
• as your business grows, you may be able to
extend your existing premises, avoiding relocation costs DISADVANTAGE
BUYING A PROPERTY
• you'll need to come up with a substantial
mortgage deposit. DISADVANTAGE BUYING A PROPERTY
• There may be some sacrifice on location
desirability, because many of the prime locations may be available for lease, but not for sale. DISADVANTAGE
BUYING A PROPERTY
• If you own premises, you may find it
harder to relocate your business, because selling business premises is a complex and sometimes lengthy process. DISADVANTAGE
BUYING A PROPERTY
• You’re in charge and will be the one
responsible for all maintenance and repairs that a commercial landlord would normally handle for you. DISADVANTAGE BUYING A PROPERTY
• Any fall in the value of the property will
decrease your capital. WHAT IS LEASING OR RENTING?
• A compensation paid by a tenant (or
lessee) to the property owner (or lessor) for use or occupancy of a property. ADVANTAGE OF RENTING A PROPERTY • Flexibility of renting business premises.
• Financial benefits of renting business
premises.
• Maintenance of rented business property.
DISADVANTAGE OF RENTING A PROPERTY • Paying Rent Is Less Stable And Less Economically Viable
• Forced Relocation Can Stunt Business Growth
• You Miss Out On The Economic Value of
Owning Your Space DISADVANTAGE OF RENTING A PROPERTY •Your Workspace Is Not Yours To Fully Customize
•You Miss Out On Leasing Opportunities
Of Your Own BUILDING NEW RESTAURANT VS. BUYING AN EXISTING RESTAURANT Buying an existing restaurant is a major investment. In many ways, it is more complicated than opening a new one. New restaurants face specific disadvantages: no established clientele, no reputation, no staff. Buying an established business, however, comes with a host of challenges and practical pitfalls to (hopefully) avoid. ADVANTAGE OF BUYING AN EXISTING RESTAURANT • There are little to no start-up costs.
• Existing inventory and receivables.
• The ability to jump-up the profits right away
• All necessary registration and paperworks
DISADVANTAGE OF BUYING AN EXISTING RESTAURANT
• Higher cost than starting a business
• Hidden problems of the business • Possible uncollectable debts • Existing contracts that you have to see to the end STARTING STEPS IN BUYING AN EXISTING BUSINESS • Step 1: See what you want
• Step 2: See what you are made for
• Step 3: See whether the business suits your
needs
• Step 4: See whether it seems worth it
INTERMEDIATE STEPS IN BUYING AN EXISTING BUSINESS • Step 5: Become diligent
• Step 6: Determine the value (capitalized earning approach,
cash flow method, excess earning method, tangible assets method, value of specific intangible assets method)
• Step 7: Doing deeper research
• Step 8: Hire professional help
CLOSING STEPS IN BUYING AN EXISTING BUSINESS • Step 9: Review the adjusted purchase price