At Bizpappa, we’re committed to helping restaurant owners sell their businesses in the best ways possible- optimizing for sale value, least amount of overhead costs, least contingencies, and more. If you’re ready to sell your restaurant and want to speak with one of our tenured partners (free consultation), please head over to our website and get in touch.
If you’re on the fence about selling, or are perhaps just looking for some oversight into how to get the best deal possible, then stay tuned. In this article, I want to highlight 5 important tips for selling your restaurant: how to set yourself (and your business) up for success to get the most value possible, with the least headache.
1. Address the Presentation
Just like any property or real estate listing, presentation is so critical for that initial walk through. From the simple things like updated cabinetry and visual embellishments, to the visual quality of the floors (are they cracked?) and the more demanding assets like exterior siding and kitchen appliances, a potential buyer will be inherently looking for what’s wrong with the place. HINT: a paint job goes a long way!
It’s common practice for serious buyers to first attend the restaurant as a customer- especially if they plan to treat it as a near-turn-key business. Make sure your staff is in tip top shape and ready to answer any questions that might get thrown at them (hopefully they already are, but just to be sure). Additionally, make sure the exterior/entrance of your establishment is safe and comfortable for customers. Buyers are mindful of things like foot traffic and the potential crime rate in the area. While local crime rate might be outside of your control, a clean foyer can be addressed in a single afternoon. Imagine you are a potential buyer walking into your establishment. Put yourself in their shoes, and spot the particularly problematic areas of your restaurant.
2. Prepare a Financial Profile
When it comes to serious buyers, timing is very important. If your finances are scattered and incomplete, a potential buyer may have reservations about the way your building was managed, and might be hesitant to proceed into negotiation. Having your finances accurately and efficiently compiled, will demonstrate to buyers your attentiveness to the business, and will also help you cycle through interested buyers more quickly.
At the very least, you should keep last year’s profit and loss statements for potential buyers to evaluate. Include your inventory and other assets such as specialized equipment and furniture. Keep food waste cost and cash sales records. If you have any debt accrued, mention that to your buyers up front, it can help prevent complications down the road. A comprehensive financial record will impress potential buyers and improve your chances of selling the business at a higher price.
3. Set a Fair Asking Price
I get its this restaurant is your baby that you’ve built up for the past number of years. To have a good sale, you’ll have to set an asking price that is fair and actually worth the value. Unfortunately there is no way to put a monetary value on personal relationship, though if you keep your financial records in top shape (previous point), you might be able to prove significant swings in traffic due to seasonal events, etc.
If you’re unsure what your location is really worth, reach out to us at bizpappa.com and we can help run a few reports, to give you a fair estimate for how much it might be listed at.
4. Evaluate Your Leases!
When selling a restaurant, keep in mind that you’re also likely selling many of the core pieces of equipment (unless otherwise negotiated). Do a thorough check if you are leasing anything in your restaurant, before you close a deal and realize you’re stuck paying for something that legally belongs to the buyer. In many cases, the buyer will simply buy your existing leases as well- but it’s good to do this planning in advance, to save time and peace of mind.
5. Hire a Business Broker
There are no laws saying you can’t sell a restaurant without a broker, but typically it’s good to work with someone who knows how to accurately navigate the complexities of restaurant sales. This is especially true if you’re a first time seller (maybe you inherited the restaurant from family) and have no experience in closing deals on your own- find yourself a high quality broker to walk you through the entire process and make sure you’re getting your worth for the place.
At BizPappa, we pride ourselves in helping educate sellers and negotiate good deals in the sellers favor. For more information about how we can help you sell your restaurant, visit our website. You can also get in touch with us directly, as firstname.lastname@example.org.
Selling your restaurant requires a lot of planning and preparation. For the first time seller, this can be complicated and potential oversights might end up costing big. If you have any questions or comments, please feel free to reach out to us at email@example.com