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[Rick Braa] Essential Strategic Decisions
Acclaimed restaurant consultant Rick Braa took the time to host a comprehensive webinar on financial strategies and tips to make use of during the coronavirus crisis. In part eight, Braa went into the essential strategic decisions you’re going to make in the near-future.
These decisions generally fall into the categories of buying, selling, declaring bankruptcy or else simply closing up shop and handing over the keys.
Perhaps most surprisingly is that, for all the chaos of the world today, now is a great time to buy. If you have the capital, look into buying a new location. Start-up costs are low and Braa advises you steer clear of the trendy downtown location and look instead to the suburbs. People want to eat closer to home and momentum is already pushing in that direction as more people work at home.
Another good option to consider is a merger. Two good companies, both with existing infrastructure, could survive a weakening period by merging and consolidating together.
For some, however, the passion and drive for business simply isn’t there anymore. To them, Braa says this isn’t a terrible time to be considering an exit. You may be selling at a discount, but if you are ready to sell, now would be the time. Do not wait for winter, when sales are down.
Arranging a workout with your bank puts you right next to bankruptcy, Braa said. You can work with banks and vendors for a sort of forgiveness program through them to get out of debts. Workouts would be a special class, but it would clear your balance sheet out.
Filing bankruptcy is also an option — filing Chapter 11 may protect you from your vendors, but you will still be liable for some things, like payroll taxes. This is the option of last resort, as you’d imagine.
Finally, if all else fails, close up shop, let everybody go and hand over your keys to your landlord. This is an option and working with some of the landlords to ensure a tidy exit may simply be the best move for both parties.