As a business broker we are aware of the following market realities (Facts)
A marginally profitable food establishment in New York City (NYC), such as a Deli, Restaurant or Pizzeria sells for significantly less than the cost to build it and bring its sales up to the current point.
Many of these restaurants are marginally profitable because of the owner’s personal situation. Examples of such are the owner lacks time, capital, interest, creativity, employee management skills, or possesses negative traits such as a personality disorder, laziness, depression, low energy, low cognitive ability, poor time management skill, alcoholism, poor health and inability to comprehend the reality of the situation. Often life events such as divorce suck the energy and the money from the owner thus weakening the business and in some cases the court even forces the owner to sell the business to pay the other spouse.
A business is like a paint brush, in the hands of master a highly profitable world class business will be formed, in the hands of an novice a mess will be made.
A business is like an ice burg where 7/8 of its’ assets are hidden from view.
A business is climbing a cliff that has a beautiful green bountiful meadow at the top.
New York City, NY.-( NYC ) is the largest city in the United States with a population of 8,550,405. It is the 11th largest city in the world. Therefore we have a virtually unlimited pool of potential customers and a master business person can make a fortune by owning a small business.
Given the above market realities, the strategy is to purchase a business below the cost it would take to build it and then change it, make it profitable and expand it thus reaping all the future profits or even selling it for exponentially more than you paid for it.