Let’s make a deal
Source: Financial Times
Times of uncertainty create opportunity – and the restaurant industry offers plenty of both these days. Investors and lenders are watching. After all, it could be a great time to get a favorable deal on an undervalued investment or to make some money on businesses looking for some help to stay in business or to reach the next level. Are you looking from additional support, whether by pursuing a higher-stakes private equity investment or by simply seeking some additional financing with fewer strings attached?
Private equity investors have great interest in the restaurant industry. In the U.S., the pandemic has magnified how much consumers value their favorite restaurants. Further, since the restaurant sector is among the only sectors that is unaffected by the likes of Amazon, private equity investors see many opportunities. For restaurants looking for additional resources to bring greater efficiencies to their operation, expand into new markets, or tap into investor expertise in finance and management, pursuing these partnerships may help bring a growing business to the next level.
They can also generate problems if the partners disagree on goals, lack shared values, or have different short- and long-term priorities. This can damage the restaurant’s relationships with employees, customers and suppliers. To determine whether to pursue a private equity investment in the business, approach expert advisors at the outset who can guide you through the process, provide advice on the ideal investors for the business, and help you understand your company’s standing and value in the market in order to determine a fair purchase price. Investment will require compromise, so clarify your goals and values at the start so you understand what lines you are willing and unwilling to cross – and what values you need to share with your investors. Do your own homework so you’re prepared to share and discuss balance sheets, cash flows statements and other documents that explain your business results and strategies. At the end of the process, you should have a clearer understanding of your risks, the steps you must take to mitigate them and what factors make your business an attractive investment. An investment banker can then help you clarify your pitch to potential investors.
Perhaps your business simply needs an extra infusion of capital for a technology investment or a remodel to make your operation more profitable. This is another area where financial institutions are eager to make deals. (Even DoorDash has entered the market recently by offering financing to its restaurant partners.) As rising interest rates loom, it’s a good time to refinance, if desired, and to develop relationships with lenders who are looking to put good assets on their balance sheets. Having a strong lending partnership will give you more solid footing when you’re ready to make strategic transactions down the line.
Private equity investors have great interest in the restaurant industry. In the U.S., the pandemic has magnified how much consumers value their favorite restaurants. Further, since the restaurant sector is among the only sectors that is unaffected by the likes of Amazon, private equity investors see many opportunities. For restaurants looking for additional resources to bring greater efficiencies to their operation, expand into new markets, or tap into investor expertise in finance and management, pursuing these partnerships may help bring a growing business to the next level.
They can also generate problems if the partners disagree on goals, lack shared values, or have different short- and long-term priorities. This can damage the restaurant’s relationships with employees, customers and suppliers. To determine whether to pursue a private equity investment in the business, approach expert advisors at the outset who can guide you through the process, provide advice on the ideal investors for the business, and help you understand your company’s standing and value in the market in order to determine a fair purchase price. Investment will require compromise, so clarify your goals and values at the start so you understand what lines you are willing and unwilling to cross – and what values you need to share with your investors. Do your own homework so you’re prepared to share and discuss balance sheets, cash flows statements and other documents that explain your business results and strategies. At the end of the process, you should have a clearer understanding of your risks, the steps you must take to mitigate them and what factors make your business an attractive investment. An investment banker can then help you clarify your pitch to potential investors.
Perhaps your business simply needs an extra infusion of capital for a technology investment or a remodel to make your operation more profitable. This is another area where financial institutions are eager to make deals. (Even DoorDash has entered the market recently by offering financing to its restaurant partners.) As rising interest rates loom, it’s a good time to refinance, if desired, and to develop relationships with lenders who are looking to put good assets on their balance sheets. Having a strong lending partnership will give you more solid footing when you’re ready to make strategic transactions down the line.