Four Options for Saving or Seliing Your Restaurant

We've all been there: Pounding the numbers with hopes of coming out with a different answer. The ten questions in the previous post should help you come to the realization that you need to make some changes.

The definition of insanity is doing the same thing over and over and expecting different results. That could define many restaurant owners in today's economic climate.

The options we face when we are near the end of the run are pretty simple and basic.

 1). Take whatever cash you have and remodel, redesign, your space.

 2). Consult your account and possibly a bankruptcy lawyer to counsel you on your restaurants life expectancy.

 3). Pay the bills, clean up the debt, and negotiate out of your lease.

 4). List the restaurant for sale.

None of these are easy to consider or accomplish when you have limited revenue and the coming months look gloomy. However, there is light at the end of the tunnel.

My exit plan preference– having used all four either individually or in rapid succession is number 4, selling the restaurant. Although this may not seem feasible if your numbers are down, your customer count almost non existent and your payables mounting, but there still is restaurant money out there.

In San Francisco restaurants are being sold or closed daily. And, there are always new buyers waiting in line to develop a new concept or revamp an old, tired one.

The key to any restaurant sale is to sell while you are open. You can't close your restaurant and expect to recoup much of your investment. Restaurant owners hover around like high flying birds in search of road kill waiting for doors to close one last time.

You will need to buy time if you are considering a sale of any magnitude. That's were the number 2 comes into play. Bankruptcy is not as evil as people think. Although it is difficult to deal with, today, bankruptcy is a business tool. It not only buys time, but enables a company to rethink and regroup in order to survive in its present state or sell to new owners.

However, the combination of deciding to sell and then making the decision to claim bankruptcy to put your house in order is often difficult and time consuming.

Whenever you are considering these options you will need to consult your accountant, your lawyer and probably a bankruptcy attorney. However, once you do, and you come up with a plan, you will see light at the end of the tunnel.

Now don't think that your problems are over. The sale of your restaurant is going to take hours of organizing, sorting and structuring a plan that is fair and equitable for everyone involved. If your lawyers advise you to explore the bankruptcy route, the paperwork can be tedious, the filing expensive and the time to resolve matters, lengthy. 

However, the end result could be a win-win for you, your vendors and your future.