Expanding?

[Mr. Delicious]

I currently own a dessert bakery\coffeehouse, I am a culinary grad with degrees in culinary arts and food and beverage management. I have been open for about a year and a half, and have started to be profitable. Here are my current issues, the building I rent is also home to a hair stlylist school, which has recently been sold, the new owners are building a new school, and the building I am in will go up for sale in several months. Because of the owners age and health I am on a yearly lease, this caused all kinds of issues with the bank because my loan is for longer than my lease. So I have been stressed out cause of these issues.

Recently I was approached by someone who runs a successful lunch only cafe nearby and he is interested in selling, this location is even better than the one I have currently. I think this would be a dream, I could get to show off my skills much more than I currently can. I would combine operations, there is a large enough kitchen to do both.

So my questions are will the bank likely finance something like this, I have only been open a year and a half? Do I lose my entity? The location is about 40 seats with 70 seats on the patio, due to the location much of the business is take out. I would never be able to do this without the skills I have learned since opening my business, I know it would be much much easier a second time around, it would just take a modified business plan, predicting sales would be much easier, I have his financial info, and my sales history.

I meet with my banker and accountant this week. Any advice??

[NancyH]

Hire a local attorney who has some experience buying/selling restaurants and related issues to advise you. Good luck!

NancyH (an attorney in real life)

[prasantrin]

Make sure you have access to good staff before expanding. If it's difficult to get good staff in your area, you're going to be in trouble if your business expands as much as you think it will in the new space.

Edited November 7, 2007 by prasantrin (log)

[Mr. Delicious]

Hire a local attorney who has some experience buying/selling restaurants and related issues to advise you.  Good luck!

NancyH (an attorney in real life)

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I am quite lucky that my father has been in the restaurant business for all his life, so his advice is free, however I will meet with an attorney soon.

"Make sure you have access to good staff before expanding. "

That is one of the reasons for the current owner to leave the business. I know several potentional "key" employees, and will still run a small staff. The potential new location is about 45 seats, and 75 seasonal seats on the patio which will be great when spring rolls around, and by then I should be trained and ready.

[SundaySous]

If financing fails I wonder if the seller would be open to selling on contract? Maybe give you a monthly mortgage with agreement to get financing in 3 or 5 years.

[Mr. Delicious]

If financing fails I wonder if the seller would be open to selling on contract? Maybe give you a monthly mortgage with agreement to get financing in 3 or 5 years.

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We are working on a lease to suite us both that will include options to buy after 2 or 3 years, reflecting what I pay in rent.

[KatieLoeb]

If most of the business will be takeout, then having 110 seats isn't really helping you. Is the revenue stream from takeout going to be enough to pay the rent and operating expenses for the larger space? I'd be concerned about having that many seats with no butts to put in the chairs. What exactly makes you say that "due to the location" much of the business will be takeout? Obviously there are people eating lunch/dinner if there's takeout business. What would prevent them from staying and dining in? I'm not sure I understand the logic behind that statement. Please explain this further so we can be more specific with our advice.

[Mr. Delicious]

If most of the business will be takeout, then having 110 seats isn't really helping you.  Is the revenue stream from takeout going to be enough to pay the rent and operating expenses for the larger space?  I'd be concerned about having that many seats with no butts to put in the chairs.  What exactly makes you say that "due to the location" much of the business will be takeout?  Obviously there are people eating lunch/dinner if there's takeout business.  What would prevent them from staying and dining in?  I'm not sure I understand the logic behind that statement.  Please explain this further so we can be more specific with our advice.

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It is in a downtown location, that is currently 50+% is takeout, due to the fact there are only 42 seats inside (its too cold for outdoor seating other thatn may-sept.) there are also about 10,000 people who work in a 2 mile radius, in a suburban area of 80,000 to 100,000. Also he is currently open 10-4 and I would expand those hours, I currently sell cheesecake and coffee and am open 7-8 his location is more accessable than my current, and I see the coffee business expanding. I also would like to expand into doing a small dinner menu, and would take advantage of the beer and wine license doing happy hour apps and having bands play on the patio etc. What else didnt I cover?

[Mr. Delicious]

Another question: I am currently Mr. Delicious Cheesecake Cafe, with the addition of luch and dinner what do I call it? My father says Mr. Delicious Gourmet Grill and Cheesecakes, I agree that I have to keep cheesecakes in the name but I HATE the word gourmet, and it will be quite casual. So any recomendations??

Also this is a modification of the business plan that I currently have. I need to finalize and test the menu and design etc. We are currently negotiating on when he would close and I would take over. He asked for the end of the year which is impossible,and I want the first of March, is that too much to ask??

[SundaySous]

This is in Bismark ND?

Tough one on the name without having a feel for the area. Keep in mind It's your money and future I'm playing with, worse that will happen to me is I won't be able eat there six months from now.

My gut is the seller wants you to have it. His willingness to quasi finance you for a while says to me he has faith in the location and carry over revenue based on past experience.

I can't imagine 3 months being a deal breaker.

I wonder if you would consider incorporating one of those new diode signs I see more and more of. Really hard to ignore a sign like that says "Coned Beef, Side & Drink $5.50 Today" With these new signs you could even flash a picture in color. Every time I pass the one by me I have to look at the special.

That guy starts advertising cheese cake slices I'm gaining weight.

On the name change got nothing. If you keep the current name (actually I like that idea) I suggest registering these domain names right now, MRDELICIOUSCHEESECAKE.COM & .net

One of the reasons I think the current name would work: "The Cheesecake Factory" this chain seems to be doing well.

edited for trying to speill at almost 2:AM...DOH!

Edited November 12, 2007 by SundaySous (log)

[prasantrin]

Another question:  I am currently Mr. Delicious Cheesecake Cafe, with the addition of luch and dinner what do I call it?  My father says Mr. Delicious Gourmet Grill and Cheesecakes, I agree that I have to keep cheesecakes in the name but I HATE the word gourmet, and it will be quite casual.  So any recomendations??

I can't say I'm a fan of "Gourmet Grill and Cheesecakes". First, in a place like Bismarck, there may be a chance that people will be put off by "Gourmet". It sounds a bit pretentious, or people may think any "gourmet" place will be too expensive or too "high-brow" for them.

Can't you keep your current name, then for example, under the sign you could write "and so much more" or something like that. So it won't be an official part of your name, but it will let people know you offer more than just desserts.

Regarding dinner, is downtown Bismarck busy enough to add to your business at night? If it's anything like downtown Winnipeg, you might be better off not doing dinners, at least not until you are well-established as a place to go for meals rather than just desserts or snacks.

Also this is a modification of the business plan that I currently have.  I need to finalize and test the menu and design etc.  We are currently negotiating on when he would close and I would take over.  He asked for the end of the year which is impossible,and I want the first of March, is that too much to ask??

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If you can't do it at the beginning of the calendar year, perhaps the beginning of the fiscal year would be better. In terms of taxes, the beginning of March might throw things off a bit. But with regards to your question, I don't think it's too much to ask, at all.

[Mr. Delicious]

Another question:  I am currently Mr. Delicious Cheesecake Cafe, with the addition of luch and dinner what do I call it?  My father says Mr. Delicious Gourmet Grill and Cheesecakes, I agree that I have to keep cheesecakes in the name but I HATE the word gourmet, and it will be quite casual.  So any recomendations??

I can't say I'm a fan of "Gourmet Grill and Cheesecakes". First, in a place like Bismarck, there may be a chance that people will be put off by "Gourmet". It sounds a bit pretentious, or people may think any "gourmet" place will be too expensive or too "high-brow" for them.

Can't you keep your current name, then for example, under the sign you could write "and so much more" or something like that. So it won't be an official part of your name, but it will let people know you offer more than just desserts.

Regarding dinner, is downtown Bismarck busy enough to add to your business at night? If it's anything like downtown Winnipeg, you might be better off not doing dinners, at least not until you are well-established as a place to go for meals rather than just desserts or snacks.

Also this is a modification of the business plan that I currently have.  I need to finalize and test the menu and design etc.  We are currently negotiating on when he would close and I would take over.  He asked for the end of the year which is impossible,and I want the first of March, is that too much to ask??

←

If you can't do it at the beginning of the calendar year, perhaps the beginning of the fiscal year would be better. In terms of taxes, the beginning of March might throw things off a bit. But with regards to your question, I don't think it's too much to ask, at all.

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I agree I hate the word gourmet, there are a few places downtown that do great dinner business and this is a very high traffic count location, but I know that most of my business will be from lunch.

Thanks for all your help guys. A little support is always great.

[Kajikit]

'Mr Delicious' is a good name all by itself... it could cover anything. You could put 'Cheesecakes' etc on the sign to help pull people in.