Tips to improve the process of selling your restaurant and getting the most value for it
Are You Ready to Sell Your Restaurant?
Selling a restaurant can take 3-4 months to sell on average, so being prepared for this process is important. Having a business advisor alongside can help expedite your process by providing the necessary tools and preparing all materials that will be needed in the procedure.
Buyers will either have the available cash or go through a bank to get a loan. Either direction will still need preparation as most interested buyers will always want to look at previous financials and income taxes. Asking them to sign a non-disclosure agreement may be necessary.
Restaurant valuations will normally broken down into four factors:
As you know, foot traffic and optimal location is a big factor in your restaurant’s value. However, this isn’t something you can change prior to your sale. What you can do in advance to help get the most for your business is making sure that you have negotiated your lease to the best terms possible (unless you own the land), to ensure that the process is easier on you and the buyer.
Presentation and Condition
Better condition means less work and investment for the buyer. Making sure your restaurant is presentable and maintained increases your chances of selling because it not only tells the owner that less work needs to be done, but also suggests that the overall maintenance of the restaurant is not too costly or difficult.
Financials, similar to your location, is not something you can do something about at this point. What you can do to better prepare is to have all your books ready for revision, making sure you detail and highlight overhead, food, and labor costs to better outline them to the buyer. Keep in mind, a buyer getting a loan will need exact information that will help them expedite their process.
Think of it this way, if you are selling a restaurant with management in place, the buyer is only looking for an investment with immediate revenue streams, with the added possibility of making some changes. A restaurant with no management in place means the owner will either have to manage it, or will need to look into management staff, which can become time consuming and costly. Something to keep in mind, the owner may choose to manage the restaurant if they have prior experience or if they wish to do so. This is an important question to ask.
Overall, the process of selling your restaurant will never be that easy or quick, but you can certainly help the process be less aching if you are better prepared for the process. The golden rule is simple, the more in-touch you are with your financials and your restaurant operations, the more confidence and peace-of-mind you will give your buyer.
Having a trustworthy business broker by your side will help you eliminate the risk and get the most value for your restaurant. Jan Wild has over 35 years of experience in business valuations and selling processes. Contact Jan for a free consultation.