Business Brokerage
Business Analysis-Buying:
Purchasing an existing bar or restaurant is ideal for those that are experienced in the industry because they provide immediate revenue upon acquisition. New owners of a “turn-key” operation also don’t have to initially worry about equipment, labor, or establishing their name, since this will have already been done prior to their arrival.
That’s the easy part. The tricky part is determining whether or not your buying a business that’s on its way up, has stabilized, or is on its way down. You also want to make sure that its location, access, structural integrity, and reputation are all acceptable since they will all be critical factors in determining your success or failure. This is where you will need a professional
business analysis to be conducted on the business you seek.
On your behalf, Charlie’s can conduct a comprehensive analysis on any existing operation’s lease or mortgage agreements, financials, location, inventory systems, marketing strategies, equipment, furnishings, building integrity, and accessibility. Following this assessment, we will generate a detailed report for the prospective buyer on the operation that is sought for purchase and assess a fair market value for the business itself and any applicable real estate. This not only will ensure that you only pay a fair market value for the business, but also a business that has been determined to be profitable and successful.
Selling:
Thinking of putting your bar or restaurant on the market for sale? Charlie’s can assist you with all the details. By doing a full market analysis on your business we can determine what your business and property are currently worth by evaluating your gross sales, location, years in business, equipment & furnishings, and regional real estate values and costs. We have agreements with dozens of trusted commercial realtors across the country that can represent your interests in any type of commercial property transaction.
If you seek to lease your property, our representatives can assist you in developing net or gross lease agreements for prospective tenants, negotiate gross sales leases, and even assess market rates and availability in your region.
Appraisals:
If you simply seek to have your business appraised for loan or tax purposes we should be your first call. By simply assessing your businesses worth, you’ll get the satisfaction of knowing that your hard work has not only paid off, but has also transformed itself into an asset. And if there are recommendations to make your bar or restaurant even more marketable and valuable, we’ll tell you what they are and show you how to accomplish them!
Chicago Area Buyers & Sellers
Charlie’s Professional Bartending has licensed commercial realtors on staff that can assist you in the purchase, sale, or lease of your bar or restaurant. With over twenty years of experience in the bar and restaurant industry, our specialized expertise in commercial real estate for these types of businesses is unmatched. Contact us today to get a no cost, no obligation, market analysis of your property, or find that ideal location for your new bar or restaurant!
Some Helpful Tips
Selecting a Location:
Choosing the right location for your bar is extremely important. Considerations should include the needs of your bar, where your customers and competitors are, and other things such as taxes, zoning restrictions, building codes. The choice of a bar or tavern location has a profound effect on the entire business life of an operation. A bad choice may all but guarantee failure, a good choice, success.
The first step in choosing a bar location is deciding on your personal preference. Before you do anything else, define the type of bar you seek in the broadest terms and determine your long term objective. Write them down. Although learning about the demographics, competition, traffic patterns, and taxes in the area you seek are important, these factors are just a part of a location analysis.
Once you have spotted a tentative location using these factors you are only half way done with the job. Before you make a commitment to moving in and setting up, you must carefully check several more aspects of the location to help insure your satisfaction with, and most importantly, your success at the site you've chosen.
Lease Agreements: Commercial lease rates are typically quoted in terms of annual rent per square foot. So if you see an advertisement for a 500 square-foot studio at $15 per square foot, that will translate to an annual rent of $7,500 or a $625 monthly rent payment. You will also need to find out whether the $625 covers a gross or net lease. As mentioned previously, under a gross lease you are only responsible for your rent, but under a net lease you will be responsible for your rent and additional operating expenses, which may include your utilities, real estate taxes, insurance expenses and CAM. These charges may be referred to in your lease as "TMI" (taxes, maintenance and insurance) or "additional charges.”
Discuss what additional charges you may be responsible for on a monthly or annual basis (if any) with your landlord. You also want to make sure the lease accurately reflects which expenses will be your responsibility and those to be paid by the landlord. In a net lease, these costs typically fluctuate on a monthly basis, so be prepared for fluctuations in your monthly payments. You also want to make sure that the landlord provides you estimates (usually through back statements and bills) of the costs. This way you can have a reasonably accurate estimate of your total monthly financial commitment and responsibilities.
Commercial Mortgage Loans: Lenders are much more cautious in their dealings with commercial real estate than with residential and will require a down payment of at least
30% and perhaps as much as 40% of the value of the property. In addition, lenders are not as lenient with commercial requirements and will likely not reduce the down payment amount.
The remaining balance of the purchase price is usually paid through a mortgage or another form of loan. Typically, it is beneficial if you have as large a down payment as possible. The larger the down payment, the smaller the loan you have to take out, which translates into a lower monthly mortgage payment.
In purchasing commercial property, you may find that the commercial mortgage loan was far easier to obtain than the actual business loan itself. This is due to the fact that the property your purchasing is the banks collateral against default, where your business itself may have little to no collateral. Don’t give up, this process just takes time and patience.
