39. HOW TO OPEN A RESTAURANT WITH NO MONEY

How to Open a Restaurant with no money?


Maybe you feel stuck working at a restaurant for years and you
are researching online ways to open a restaurant with no money
which is a question I received from Joseph. Joseph sent us a
message on our website. You can do the same, go to our website
MakingDoughShow.com, scroll down and submit your question and
I’ll be happy to cover it in a future show. 


Joseph is passionate about cooking and he asked me how he can
open a restaurant with no money. 


Let’s talk about why you need money to open a restaurant! 





We have 2 scenarios: 


Build Out a new restaurant 


Buy an existing restaurant 





Building out a restaurant from scratch can cost anywhere between
50K to 70K.. 


It would involve a landlord giving you somewhere around 90 days
after which the rent will start. 


You have 90 days to BUILD the restaurant OUT. I mean, flooring,
gas pipes, plumbing, makeline, walk in and other refrigeration,
plates, forks, stove, AC unit, POS, bar, tables, chairs..
Everything. You get the idea!  I strongly not recommend a
Build Out if you are new OWNING restaurant. 


Owning vs working at a restaurant is very different. 


---- 


Ok. we narrowed down your options to 1: buy an existing
restaurant. You have a few options when it comes to buying an
existing restaurant:  The restaurant is closed and it’s an
asset purchase The restaurant is operational and it is failing =
at break even point or below break even point = you make 0 to
negative amount of money at the end of the month in terms of
PROFITS. 


When we bought our first restaurant, it was making around $450K a
year which is good bit of pizza if you consider and it was a few
hundred thousands of $ BELOW breakeven as in, after making
hundreds of thousands of $ you have 0 profit. 


These are your 2 options and that is why the owner is
selling! 


Let’s talk about Asset purchase. Here there are also 2
options: 


Asset purchase means you are purchasing the physical assets of
the restaurant. Ovens, makelines, furniture, cooking appliances,
tools and etc. 


This amount varies depending on the asset you are purchasing


NINJA Tips: 


You can hire an equipment appraisal person to come in and
appraise the asset! As in, the owner and the broker say it’s 35K
and maybe the actual value of the asset is $25K and you pay an
equipment appraisal person $400 and that can save you a few
thousands of dollars.


We bought a restaurant for 40K and the assets looked wonderful
and we had to re-purchase and replace the makeline, the AC unit,
2 refrigeration units within the first MONTH. If I could go back,
I would definitely hire a kitchen equipment appraiser. 


If the restaurant is below breakeven at the time of purchase, you
MUST have a very strong marketing plan in place friend or you
will be decimated.





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// WHO: Hengam Stanfield is the co-owner of two restaurants in
San Antonio alongside his husband Matt. Their background is in
engineering. They tripled their restaurant sales in less than 5
years with 0 prior restaurant experience.They believe every
restaurateur deserves owning a restaurant that does not own
them.