Have you seen Casablanca?
OK, so Polk County is not Morocco. And maybe it’s a bit of a stretch to compare this well-run “club-type” specialty restaurant with Rick’s Café American (Rick = Humphrey Bogart, of course.)
But the customers who have taken the trouble to type in all of those high Google and Yelp ratings might like the comparison. They keep coming back, and they say very nice things about the service, the food, the pricing, and the entertainment!
Here are a few examples:
Their coffee is great! I haven’t been here for any events, outside of the street concert they put on for the solar eclipse. That in itself makes me want to spend my money there. It was a great time and something so different and exciting for our small town.
Anyway, the coffee…it’s delicious every single time!
This was the venue for our office Holiday party. It was large enough for 40 people. The wait staff was very nice and bussed the tables quickly. Decent selection of wine and beer. Will go back and try the coffee and pastries, as I have been told they are delicious.
This cute little café is the perfect hang out spot. You can grab a quick smoothie, get some lunch, or even enjoy live music on Tuesday nights. It’s a homey environment, with lots of rustic, antique features, and a back room that can be rented out for social gatherings. It’s really the perfect little joint, and their iced lavender lemonade is to die for! I love this place. See you next Tuesday!
Owning a restaurant is not for everyone; only those who like people need apply. It is necessary to enjoy watching people have fun. And it helps if you’re making a whopping re-turn on your investment at the same time…
The owner has tweaked the model so it really works well in its rural market. Not easy, given the wide-ranging demographic mix, but it is working nicely and the business is expanding. The buyer will be well-advised to take advantage of this experience, and leave things the way they are. Just keep on growing the business with the same menu and branding.
One significant example of the unique business model is the inclusion of coffee roasting and the espresso bar. You might expect to find such an artisanal approach in Portland metro, but in an Oregon tourist route? Rare. This is very likely the only establishment that offers these combined services in its market area. Competition? –None.
By the way, the opportunity for growth and expansion is significant. The restaurant is al-ready a local institution, a fixture recognized by established businesses and government offices. More marketing to these segments will be time well spent.
And of course you can never have enough Internet exposure. With the excellent foundation that is already in place the new owner can just keep on working the many social media and promotional avenues now available.
What about traffic flow?
The business is located on the street that happens to be the primary street through town, which is also part of a historic Oregon scenic route. Did someone say, “Tourist trade?”
Not to mention that this location is in the very heart of the commercial business district. Many businesses operate in “commercial” space, but very few can lay claim to being right across from the courthouse!
Wine is served, and the necessary license is in place. The new owner will need to qualify for it, but should have no trouble doing so.
Why is it now available to acquire? The answer is simple—the owner has built this one from the ground up with the intention to sell it, and he wants to take advantage of its success with what business investors call a “liquidity event.” OK, a sale.
Strong historic ROI
If you read my other listings, you will see this familiar refrain: take control of your money and put it where the investment is priced at a capitalization rate of over 30% (based on demonstrated historical cash flows). Yes, that’s right—more than ten times what you could get by handing your money to your local banker in a long-term CD.
Is there risk? Yes, all small business is inherently risky. But this opportunity has priced in the various risk elements in an objective, scored, three-year risk analysis. You can see it simply by requesting one and agreeing to the non-disclosure terms.
Like all of our listings, this company is priced to provide a strong return on investment, one that you could never get at a financial institution. These days, one is lucky to get a few percent a year for committing cash in the form of a multiple-year CD. Maybe your local bank might pay you 3% (i.e., $30 per year for each thousand dollars invested) if you’re lucky.
There are no guarantees, of course, but this business is priced on its proven cash flow over a multi-year period.
By the way, there is now a program that allows you to use your retirement fund, or part of it, to acquire and operate your own business. This degree of freedom is relatively new, and this office just managed the sale of a business under this program.
One nice thing is that there is virtually no sunk cost in supplies inventory. There is nothing wrong with having inventory, and many companies have it. But it does represent a “permanent working capital” investment. If a company doesn’t have to maintain it, the ROI is even better.
What about transition support? Simply put, yes; there will be a lot of support. From initial orientation to ongoing availability, the owner is committed to making sure the buyer gets the kind of know-how that has put them at the top of the growth curve.
Support details will need to be worked out, but the present owner will be very hands on for the first month, and then available for phone calls and emails for 3 months afterward. If the buyer wishes to retain him on a formal consulting basis, that can be discussed as well.
Expansion and Growth Potential? How might this work?
The company’s continuing growth depends on two interlocking drivers: the underlying demand on the part of local businesses and government agencies for comfortable offsite meeting sites, and the growing interest in high quality food and entertainment.
The first driver is based on local word of mouth and marketing, and the second is based on work of mouth and online presence. Together they explain why the company has achieved its present solid reputation and its level of success to date.
In this case the owner is willing to consider partial financing for the right person and the right terms. Not 100% financing, but substantial. In addition—the new, more relaxed SBA guidelines this year make for another good reason to think about getting help from the government to buy this business. The wise use of financing leverage can increase an al-ready superb return on investment.
What’s the story with the employees? Will I have to do all the work?
There’s a staff of well-trained employees who like their work, who are not likely to run away when the new owner comes on the scene. The present owner does what a typical owner usually wants to do (e.g., payroll, banking, HR, weekly schedule.) He typically spends about 15 to 20 hours a week doing these management functions, most of which can be done by one of the employees.
Real Estate Available?
Many, if not most, businesses operate in leased space. This might be good for landlords, who end up owning the property by paying the mortgage from the lease rent. Landlords know this and usually won’t sell the property.
But what does the typical business tenant get? Not as much. Use of the space, and the opportunity to pay annual rent increases!
Why not buy the real estate too? Fortunately for the business buyer, in this case the real estate is available, at a competitive market price. The business P&L has a market rate rent expense, so yes, it has been paying for the real estate.
This is especially good for the business buyer when it comes time to talk to a lender about SBA financing. With real estate included, the lender will be much more accommodating. For example, instead of a ten year loan term, they will talk about a 25 year term. In addition, the interest rate will be lower!
So, not only is the business buying the real estate for you, you get a much better cash flow as well.
Summary and Conclusion
That’s about it. The business-for-sale market doesn’t have many good opportunities at this price point (a lot of alleged businesses are really “jobs-in-disguise”, not really priced as solid financial investments.) And there certainly aren’t many businesses that run this smoothly, with so little owner involvement, and with such a strong proven return on in-vestment.
So—if you’re looking for a solid Oregon business investment that happens to be fun to own, click on the link to request a non-disclosure agreement. In a day or so you will receive a three-year financial history of cash flows and an objective, market-related risk analysis. Together, they show how the value was calculated, and they will give you the opportunity to see if you would be interested in exploring this unusual opportunity further.
Now—head on over to iTunes and watch Casablanca for one of the classic movies of all-time and a taste of owning a restaurant. Your life as an owner may not be quite as exciting as Humphrey Bogart’s, but you will have fun anyway.
Not included in asking price.
Incredibly good location, with excellent access and street parking on a major tourist route. Ample size, clean and well furnished. The real estate is available too, ask for details about it. The SBA lenders love real estate and will make a much better loan if it is included.
There are restaurants and cafes in the area, but nothing even close to the unique qualities of this combination artisenal coffee roasting facility, restaurant, entertainment venue.
Growth & Expansion:
The groundwork is laid, with local businesses, local government offices, local residents, and tourist-oriented websites. The buyer should just continue this process for predictable further expansion.
To be negotiated.
Support & Training:
One month of intensive on-site orientation, followed by 3 months of phone and email support. Potential consulting arrangement after that, if buyer wishes.
Reason for Selling:
The business was built to sell; ready for new owner to go to next level.
Licensed in Oregon