Theoretical P&L for restaurant startup. Buildup on left, income sensitization on right. FIgures in blue box represent considerations to model in the future.

Primary model will include breakeven analysis resulting from 1. initial investment (furniture, equipment, licenses); 2. cash flow over time 3. potential liquidation opportunities (sale) in order to arrive at theoretical IRR.

My assertion was that IRR for a restaurant should exceed 25% (roughly equivalent to that of a venture capital investment) given the high degree of effort required to operate the business.

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