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Thousands of restaurants close: Are you ready to sell the inventory?

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Over 5,000 restaurants across the United States closed their doors in the past 12 months. Most of them were independents, not chains. After you get over mourning the demise of your favorite Friday night spot, thoughts turn to how are we going to sell these properties?

The statistics from this week’s news shouldn’t surprise anyone. Early on in the recession Americans started cutting back on their dining out. Some cut out restaurant meals completely to save money. Those those who still ate out regularly moved to less expensive joints. Fine dining became a luxury for most Americans the past few years.

Restaurants cut expenses and adapted to the new economy (blue plate specials and coupons), utilized creative marketing techniques (Facebook and Groupon) or hung on for dear life.

Now it seems like in 2009-2010 that line snapped. With no more ways to cut costs and record level unemployment numbers thinning their dining crowds to a trickle, many independent restauranteurs threw in the towel.

In my area, there’s one restaurant that has changed hands three times in the past four years. Driving by today it looked dark at lunchtime, and someone commented to me that the location must be the kiss of death if it’s closed again.

(Question: are some locations truly jinxed or just so poor nothing could succeed there? This particular location is the middle of a small strip mall with frontage on a very busy road. It’s got easy access and visibility. What gives? Just three owners in a row who don’t know what they’re doing? Or something more?)

How do you sell this thing?

If you’re a real estate broker and you list a closed restaurant, what’s the best way to sell or market it? Obviously the best and easiest solution is to find another restauranteur (or chef who always wanted to own his own place — see prior paragraph for that downside). If the kitchen and equipment are in good working order, perhaps you can find someone who just wants to step into the prior owner’s shoes and turn the business around. That’s your dream deal.

If leased equipment has been returned and the place is a mess, one solution is to clean it out and perhaps even gut it. Make it a plain vanilla shell so that any business could see themselves there, not just as a restaurant. If it’s got a good location, plenty of parking, what else could use the building? What is the location best suited for?

Survey the neighborhood

What is missing in the neighborhood? Do a survey of local businesses and see where the gaps are. Ask people what they’d like to see in the spot. What kind of retail or services are out of the area, that they have to drive to find? What do locals wish was there?

I had a closed restaurant property with a large vacant lot that was next to a retirement development. The building itself probably should be torn down, so I was marketing a location really. Locals had to drive several miles to go food shopping. I was convinced a small grocer should move in and would make it there. There was no grocery store for miles!

Unfortunately, the large chains decided that the demographics would not support their stores. And the smaller local chains I approached were struggling themselves, and not in expansion mode. I couldn’t sell a single grocery store on the idea.

I surveyed the residents of the retirement community and found they wanted a dollar store, a crafts store, and a pharmacy. I tried approaching these kinds of developers and I got a dollar store interested. Unfortunately they didn’t want my lot and built a dollar store next door on a lot another broker had listed! It was a good idea, but didn’t sell my property.

Selling a closed restaurant is not easy, especially with financing these days. Even when you find a buyer, if it’s another entrepreneur who wants to open a restaurant, it’s going to be an uphill battle to get him to the closing table.

If the seller can handle the risk, perhaps the only way for the buyer to take over would be with seller financing — part of the deal or even the whole transaction. That only works if he isn’t so far into debt that that he’s underwater.

It’s certainly a challenge, but many real estate brokers in 2010 and 2011 had better learn how to handle these kinds of properties. There’s going to be more of them coming on the market in the immediate future.

Flickr image courtesy lindsayloveshermac

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Erica Ramus is the Broker/Owner of Ramus Realty Group in Pottsville, PA. She also teaches real estate licensing courses at Penn State Schuylkill and is extremely active in her community, especially the Rotary Club of Pottsville and the Schuylkill Chamber of Commerce. Her background is writing, marketing and publishing, and she is the founder of Schuylkill Living Magazine, the area's regional publication. She lives near Pottsville with her husband and two teenage sons, and an occasional exchange student passing thru who needs a place to stay.

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17 Comments

17 Comments

  1. Joe Loomer

    July 30, 2010 at 7:20 am

    There is a location in my town that has also had three separate owners in recent years, and just acquired it’s fourth. All restaraunts, all failed. One – The Upper Crust – was a fantastic pizza joint that was consistently the “Choice of the Town” in the local paper. I think it’s a combination of business sense and the things you state. If the traffic count isn’t there, if people can’t even see your store or park easily, you’re toast.

    In another area – a national franchise shut down, only to be gobbled up and re-opened as a sports-pub. It is doing extremely well.

    Navy Chief, Navy Pride

    • Erica Ramus

      July 30, 2010 at 6:00 pm

      Joe–I confirmed it today. Owner #3 has shut down in that location. What a shame.

  2. BawldGuy

    July 30, 2010 at 10:03 am

    Erica, I don’t envy you a bit. Been there, done that with residential income property, in previous bad times. What outsiders think is ‘creative’ doesn’t make the ‘A’ list of the real creativity pros like you generate.

    We’ve all had those ‘D’oh! Why didn’t I think of that?’ moments when a situation such as yours is suddenly and spectacularly turned around by a new tenant/business. A recent example in my neighborhood was a vacant, failed Taco Bell. It’d been vacant for literally over two years. In my opinion it was the location, as it was in the middle of a street with decent traffic, but if you were on the wrong side, you had to hang a u-turn and come back. So what do ya think has finally replaced Taco Bell and is doing incredibly well?

    A taco shop! But a typical San Diego taco shop, which means just about everything they make is wicked good. In other words, the anti-Taco Bell. It’s been almost six months now, and it’s still ‘the’ neighborhood taco shop destination. Who knew?

    • Erica Ramus

      July 30, 2010 at 6:02 pm

      That just shows that people WILL go out of their way for wicked good food, or service, or whatever you produce. If it’s a tough destination, make it worth their while!

  3. Property Marbella

    July 31, 2010 at 12:10 am

    In finances crisis are bars and restaurants the first who close down. Over here in Spain is the situation the same, your local favourite is one day gone and a new one try with a “new” concept and 3-4 months later a new one…

  4. mike

    July 31, 2010 at 6:35 pm

    I miss Pizzaria Uno.

  5. Beth Anne Grib

    August 5, 2010 at 12:15 pm

    I don’t know of any lender who wants to get within reach of a buyer trying to buy a restaurant. This is one of the toughest commodities to sell right now because the lenders know that restaurants are going under and having a tough time of it and they are either not permitted to take that risk due to stringent regulations or just simply refuse to do so. We have contacted almost 200 retailers within the last 6 months for new market areas and they all say …”Call back in 6 months”. Everyone’s waiting for that evading “light at the end of the #CRE tunnel”

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Business Entrepreneur

Teach kids music and they’ll learn entrepreneurship

(ENTREPRENEUR) Sowing the seed of music education and appreciation in your child when they’re young is a great way to produce the fruit of entrepreneurship when they’re older.

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entrepreneurship

With all the focus sports gets as the petri dish for producing driven adults, I’d like to offer up a different extracurricular activity for your consideration: music. Supporting your child as they learn how to harmonize with others will help set them up for success later in life, as music cultivates many of the characteristics that entrepreneurs rely on every day.

Iteration

Anybody who’s played an instrument or been a part of a choir can tell you that the number one thing you’ll learn in a musical group is that you won’t make it unless you practice, practice, practice. Although in the moment it’s not that great to hear little Timmy or Ginny run through their C-scale a hundred times, a few years down the line when all those hours of iterating result in the lilt of Beethoven through your household, you can be sure that your kid has learned that repeating the little steps helps them achieve large goals.

Showmanship

A large part of being a successful entrepreneur is knowing your markets, or your audience, and able to keep their attention so that they come back to you when they need your business. Being a part of an ensemble not only teaches children to be comfortable in the spotlight but to crave putting on a show.

Teamwork

When young musicians come together to play in a band or raise their voices in a choir, they’re learning a lot about how to collaborate with others in order to achieve a goal. When a young alto sings alone, her notes may sound strange without the soprano tones filling out the melody. The duet that comes from them learning to work together and complement each other builds a strong foundation for any team venture your child will encounter later in their careers.

Competiveness

Although music provides a solid foundation in harmony, it also contains just as much grit and competition as the football field. Music groups compete in regional and national championships just as athletes do, and solos offer opportunities to self-select and advocate. Hell hath no fire like a second seat musician who dreams of being first chair.

Self Confidence

Unlike sports, music is accessible to those who might struggle with finding confidence. There are no “best” requirements to play—regardless of height, weight, and other characteristics that nobody has any control over—nearly anyone can pick up an instrument or find their voice. This perhaps may be the greatest gift that you can give your child, the confidence that no matter what they look like they can excel.

As your child begins to consider the different activities that will help them build toward their future, don’t discourage them from pursuing a musical path. When they have to stand in front of an audience of their peers and deliver a presentation with an unwavering voice, they’ll thank you for the years they spent getting comfortable in the spotlight. Especially if they pursue entrepreneurship!

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Business Entrepreneur

What’s the secret to startup productivity? Here are 5 quick tips

(PRODUCTIVITY) There’s no concrete formula for startup success. However, if you study what successful startups are doing, you’ll notice that they almost all emphasize productivity. The question is, do you?

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startup productivity

At the heart of any efficient business is a productive set of processes, people, and systems. For startups with limited resources, maximizing productivity isn’t optional – it’s mandatory.

Here are some specific ways you can nudge your startup forward and increase productivity on a day-by-day basis:

1. Organize your thoughts.

“The more thoughts and ideas floating around in your head, the harder it is to concentrate on what’s in front of you,” entrepreneur Kristina Proffitt believes. “Every thought or idea that you don’t write down works like a plug, stopping your creativity from flowing freely. That’s why it’s so important to write everything down?—?even the bad ideas.”

If you’re old school, you may want to keep a legal pad or notebook on you at all times. If you’d prefer to go digital, an app like Evernote or Trello will allow you to jot down notes on any device and access them at any time.

2. Try a coworking office layout.

Believe it or not, your startup’s office environment has a direct impact on productivity. In particular, you’ll discover that the layout of the office is critically significant. Try experimenting with different styles, but you may find that a coworking layout is ideal.

“Directly inspired by an open office layout, a coworking layout also eliminates walls or boundaries, but is much larger and often shared among multiple companies,” Novel Coworking explains. “The coworking space may feature couches, shared desks, private or dedicated desks, or high counters. Coworking has the added benefit of encouraging cross-company communication and networking.”

3. Permit flexible scheduling.

The 9-to-5 schedule is no longer efficient or cost-effective. Research shows that people function differently and reach their peak productivity at different times throughout the day. If you want to maximize productivity for each of your employees, you should allow for flexible scheduling.

With flexible scheduling, you give your employees the ability to choose their hours. While some may prefer the 9-to-5 time slot, others might prefer 6-to-2 or 12-to-8. Allow your employees to set their hours (within reason) for a few months and see if you notice a positive impact on productivity. Most of the time, there’s a pretty significant boost.

4. Cut back on email.

There’s a fine line between over-communicating and not communicating enough. In startups, there’s a tendency to lean towards the first one. And while it may seem like a sound practice to communicate as much information as possible, it actually bogs down your team and inhibits creativity and innovative thinking.

Try implementing smart email practices within your company. Encourage people to only CC relevant parties and to pick up the phone when there’s something important to discuss. You may also transition to an app like Slack to cut down on the distractions.

5. Encourage physical activity

In pursuit of productivity, many people try to put in as many hours as they possibly can. But there isn’t a direct correlation between time and productivity. In fact, sometimes there’s a negative relationship.

Too much time hunched in front of a computer doesn’t do anyone any good. Encourage your team to get physical activity in the middle of the day. They’ll come back refreshed and ready to work.

The goal is to optimize your business.

Running a successful business requires an intimate understanding of how your business functions at its core. But even more important than processes and technology are the people you have on your team. It’s people who make decisions, execute, and build relationships with people and partners in the industry.

And if you want to get the most out of your people, you must learn to maximize productivity and efficiency.

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Business Entrepreneur

Top 11 productivity tools for entrepreneurs that work from home

(BUSINESS) We asked remote professionals what some of their favorite (and most necessary) productivity tools were for the home office, and have 11 ideas that you might not have tried yet.

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work from home productivity

Working from home comes with its perks – comfortable pants (sweat pants*), working at your own pace, and not having your boss breathing down your neck are only a few. But staying productive and on-task can be a challenge when the only one watching is you (and your cat [who requires frequent cuddle breaks]).

We asked remote workers how they collaborate, stay on top of their work, and get shit done. Here’s what they said are their most reliable and necessary work-from-home tools:

First, let’s check out collaboration and team productivity tools:

Time Doctor

timedoctor780x433
Manage a remote team? When you need them focused on that time-sensitive report you needed yesterday, we’ve got a solution.

We use our own time tracking tool which we find essential for remote work and remote teams. It has everything you would need to give you an analytics of your workday and managing remote teams,” says Carlo Borja, Online Marketing Head of Time Doctor. This includes real time updates, gentle nudges to get you and your employees back on track, and a free trial run.

Azendoo

azendoo
Stop miscommunication in its tracks.

One of the best tools that we use to keep in contact and make sure everyone stays on task is Azendoo,” says John Andrew Williams, PCC, Founder and Lead Trainer at Academic Life Coaching, “It is an amazing tool that allows you to assign tasks to members of your team, leave comments and messages, and organize everything based on projects. It has truly been the best thing for us to improve our productivity and stay connected when we all work remotely.

RealtimeBoard

realtimeboard
What about brainstorming and collaborating with your team in real time? “RealtimeBoard is an online whiteboard and super simple collaboration service for marketers, developers, designers and creatives worldwide with user list exceeding 675k. It’s frequently used for project management, user experience planning, creative concepts visualization, story mapping, brainstorming, etc,” says Anna Boiarkina, Head of Marketing at RealtimeBoard.

Popular Favorite: Slack

slack780x433
Without question, it is Slack! With our marketing team spread from San
Antonio to San Francisco, Seattle and Madison, we couldn’t do our job
efficiently without this messaging communication tool,
” says Marcia Noyes, Director of Communications with Catalyze, Inc.

Noyes adds, “Before I took the job with Catalyze, I wondered how I could possibly stay on top of the very technical subjects of HIPAA compliance, digital healthcare and cloud computing, but with Slack, it’s easier than email or being there in person at corporate headquarters. I don’t think I could ever go back to being in an office. With this tool and others, I get so much more accomplished without the commute times and interruptions from water cooler talk and discussions about where to go for lunch.”

Now, let’s move on to tools and tips for your health:

A treadmill desk

treadmill desk
Slump no more.

Gretchen Roberts, CEO of Smoky Labs, a B2B digital and inbound marketing agency says that her treadmill desk helps her fight through the afternoon slump. “The endorphins that are released from the walking get me right into a feel-good mood again, same as a conversation and piece of chocolate would.

Not only is it great for you, but it keeps you awake and alert so you can fight the urge to take a “quick nap” right around 3pm. Good weather not required.

Lumbar support

lumbar-support
Then there’s always the issue of your health. We asked Dr. Barbara Bergin, M.D., Board Certified orthopedic surgeon her thoughts on how to best furnish your home office, and she had a few simple ideas that go a long way.

Invest in a good chair, a McKenzie lumbar pillow (because no work chair has the perfect lumbar support), and a drop down tray for your keyboard and mouse. If you have short legs which don’t quite reach the floor, either adjust your chair (which means adjusting everything else) or get some kind of a platform on which to rest your feet. I recommend those old bench step aerobics steps.

These are all suggestions that are easy to implement and positively impact your health (and wallet, when you consider chiropractic visits, massages or even surgery).

And some of our favorites – tools to manage time, data, and communications:

ClockingIT

clockingIT
In a similar fashion to Time Doctor, ClockingIT is a time-tracking application that logs everything you do. This allows you to keep track of how much time you’re really spending on a project (or time spent off-task on a project).

I work from home exclusively as a freelance communications and marketing manager. One of my clients, Simon Slade, CEO of SaleHoo, introduced me to ClockingIT. ClockingIT, a free project management system, is now a tool I can’t work from home without. It provides an easy way for me to log my time on different tasks and communicate project updates to colleagues without sending cumbersome mass emails. I like ClockingIT so much that I’ve created an account separate from SaleHoo’s, just for myself, and I use it to manage my work for other clients as well.

This would be a great tool for freelance designers and writers who need to keep track of time so they can appropriately charge their clients.

Zoho Vault

zoho vault
Throw away the Rolodex. With all of the social media information, websites, passwords, and logins a company might need to remember, there is a better way. Molly Wells, an SEO Analyst with Web301 believes in the power of Zoho.

The one tool that I can’t work at home without is the one that stores our many clients personal information. Links to live websites, production websites, their social media usernames and passwords. All of our own websites logins, social media logins along with all the tools we use. Rather than storing all of these on our server or on pen and paper, we use Zoho Vault. It’s a lifesaver for accessing information while at home or on the go. All of our passwords are all in one place.

Cloze

cloze
Winner for most comprehensive all-in-one freelancing app goes to Cloze, which does… pretty much everything.

As a freelancer, the tool I absolutely can’t live without is Cloze,” explains JC Hammond, “Cloze is a contact management app and website that is perfect for freelancers because it is highly customizable, links email, social, phone and notes in one place, lets you track interactions and statuses of projects, companies, and people and even delivers an informative “Morning Briefing” to help get your day off to a great start.

She thinks one of the most useful tools is the email read receipts and the ability to link with your cell phone provided to track calls. It also schedules and posts social updates to Twitter, Linkedin, Facebook and other platforms. Because it’s designed for individual or very small team use, it’s easy to use and a user can efficiently run their entire day from the app.

Uberconference

uberconference
When it comes to phone conferences, meetings and client phone calls, Jessica Oman, Planner-in-Chief at Renegade Planner loves Uberconference.

She says, “As a business plan writer who in 2014 made the transition from leasing an office to working from home, I can say that Skype and Uberconference are the tools I can’t live without! Uberconference is especially wonderful because it easily allows me to record calls, use hold music, and connect with people who either call in from computer or phone. It allows me to have a 1-800 number too. It’s like having a virtual assistant to manage my calls and I love the professional feel of the service.

My Tomatoes

mytomatoes
And finally, a quick and simple idea – a timer. Jessica Velasco, Senior Editor at Chargebacks911 works exclusively from home. She uses the Pomodoro technique of time management: work for 25 minutes, take a 5 minute break, work for 25 more minutes.

She says, “I use My Tomatoes. I like this particular timer because the countdown is shown in my browser tab. I can be working on other things and quickly glance over to see how much time is left. I like to race the clock; see how much I can get accomplished before the timer goes off. I also use it to limit my unproductive moments. Fun things like checking social media must end with the timer dings.”

Got a favorite?

All of these tools are yours for the taking, so why not give them all a shot? Then, even if you’re wearing your most comfortable pants (sweat pants*) – with all of the right tools, you can run your business from home like a boss, and give people the impression that you probably showered today.

*no pants

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