If Things Are in Good Order, Buying Existing Cafe Can Be Wise Choice

Q: I’m thinking about opening a small cafe. Is it better to buy an existing business, which would include some equipment, or start from scratch?

--Molly Smith, Seattle

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A: There are some important points to consider when you’re making this kind of decision. First off are the location and the size of the existing business, obviously, and how they mesh with your cafe concept. Pay close attention as well to the price and length of lease you’d be assuming if you are taking over a lease. And do your homework to make sure that the restaurant is really as successful as the previous owner would have you believe. If it’s not successful, you’ll need to figure out why not and how you can overcome problems.

Have the equipment appraised and decide how close the equipment package and the kitchen configuration are to your concept, your menu and your staffing needs. If the equipment is in good condition and it matches your scenario, purchasing it could be a very good thing.

Make sure you discuss the situation with your accountant, though, because restaurant owners can lease new equipment, which is then under warranty, and they can use the equipment depreciation as a tax write-off for the business. This can be more beneficial financially than paying for used equipment that is out of warranty and has no depreciation value left.

For more information on starting a restaurant, go to the National Restaurant Assn. Web site at https://www.restaurant.org.

--Phyllis Ann Marshall,

principal, FoodPower, Costa Mesa

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Q: Do you know of a resource I can consult, such as a book or a Web page, for a checklist on how to start a new business?

--Matt Hrdlicka, Burbank

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A: The Internet is an excellent source of information for small-business owners, with a wealth of advice, planning information and checklists available at many, many government, organization and commercial sites, most of which include hyperlinks that will take you to even more advice and information, much of it free.

I have to recommend the Web site of the U.S. Small Business Administration, https://www.sba.gov, where you can get all the basic information you need to start a business and plenty more. From the home page, click on “site map” and scroll down to the dialogue box labeled “Starting Your Business,” where you can learn about virtually every aspect of business start-up. Flanking that dialogue box is a complete listing of all the SBA’s loan programs, which may also be helpful. The site contains a wealth of information that is easily accessible, written simply and user-friendly.

The Web site of the National Federation of Independent Businesses, https://www.nfibonline.com, is another good resource, chock full of links, business planning advice, information on securing financing as well as articles.

The Los Angeles Times also offers information for start-ups at https://www.latimes.com/smallbiz.

American Express has a site called the Small Business Exchange (https://www.americanexpress.com/smallbusiness) that features tips to a service directory to articles on topics such as “Avoiding Common Mistakes,” “Choosing a Board of Directors” and “Resources for Women Entrepreneurs.”

If you prefer more personal help, call the Service Corps of Retired Executives at (818) 552-3206 for a list of the 61 SCORE counseling centers in Los Angeles, Ventura and Santa Barbara counties. Its Web site, https://www.score.org, offers online advice and information as well as a link to a book, “How to Really Start Your Own Business,” that you can obtain for free from the group.

--John Tumpak,

public information officer,

Los Angeles SBA District Office

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If you have a question about operating a small business, send it to Karen E. Klein, Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia, CA 91016, or kklein6349@aol.com. Include your name, address and telephone number. This column is designed to answer questions of general interest. It should not be construed as legal advice.