Successfully Closing the Sale of Your Restaurant
Are you planning to sell your restaurant business? If you are, this guide can help you put your business up for sale to negotiate the best-selling price according to a fair market value.
Though finding a prospective buyer and completing restaurant sales isn’t as tough as owning a restaurant, the selling process can be quite challenging for restaurant owners.
It can be a hassle, but there’s a way to make the sale
There’s simply too much to keep in mind aside from the circumstances, family matters, and financial pressures that made you sell your own business. However, things don’t have to be that hard for restaurant owners. You can complete a successful sale with a bit of guidance from an experienced business broker and succession planning. Let’s see what it takes to find potential buyers and get the most value when selling your restaurant.
Steps to negotiate the selling price for your restaurant business
According to studies, 30% of restaurants don’t make it past the first year. That’s probably due to many different factors and circumstances that lead restaurant owners to close their businesses.
If you think it’s time to sell your business and say goodbye to your customers, here are the steps to help you ensure a successful transaction.
Invest time and effort in restaurant presentation
The first step to getting a buyer to pay good money for your business is to present it in the best light possible. Make sure your restaurant premises are clean and regularly maintained. If you have accompanying landscaping, trim it and clear any debris. An attractive and well-lit interior and exterior could be decisive factors when making a restaurant purchase. They can make or break your efforts to present your restaurant online and offline. Do everything you can to add to the perceived value of your business.
Prepare all finance statements
The financial profile of your restaurant is a determining factor when putting up a restaurant for sale on the market. If you present an offer with poorly maintained, inaccurate, or incomplete financial records, you’re hardly going to appease the buyers. Restaurant owners should invest time and effort to prepare everything for the selling process to ensure they get the price they expect. A new owner will likely ask to see confirmable and detailed figures before counting their cash. So, have all your financial records ready and present them in standardized formats, such as profit statements and balance sheets, to ensure you get the money you deserve.
Take a proactive approach to sales
Managing your next-step initiations and follow-ups is paramount to selling a restaurant with success. You can speed up the process of closing a purchase by keeping the future buyer in the loop about the next step and providing follow-up meetings. That can help you create a sense of urgency as well as efficiency. The buyers will appreciate you being forthcoming when it comes to providing whatever additional information they need to close the deal.
Hire a business broker
Though hiring a business broker is optional, their service can help a restaurant owner save time, effort, and resources when selling a business. Brokers have the sales experience necessary to complete the process, attract buyers, and secure the cash you were hoping for. For example, a seasoned and well-trained professional will point you in the right direction when it comes to understanding the market, attracting high-paying buyers, and determining the highest value for your restaurant. They can also help you improve your chances of selling.
Market to sell
You should work on a marketing plan before selling your business. Putting up a restaurant for sale in your local paper won’t be enough to get it sold.
So, create a broad marketing plan that should include multiple communication channels, such as a website, email, social media, etc. These marketing channels attract various audiences and can help you attract more interested prospects. Include unique restaurant features and selling points to improve your chance of getting the highest value for your business. Keep all property details, such as the current address, restaurant description, and other information transparent to establish credibility as an owner among interested prospects.
Appraise your business
Once you complete all these steps, it’s time to set the selling price. Many factors impact the value of a business. As an owner, you’ll want to get the best price to ensure you get back all the money, time, and effort you invested into your establishment. With that in mind, keep in mind that the buyer is hardly going to offer exactly what you offer. Since closing the sale depends on your effort to negotiate the terms with the potential buyer, consult with financial experts to weigh your options.
How can an experienced business broker help you sell a restaurant?
Hiring a professional business broker can make all the difference when it comes to determining the value of your restaurant. These seasoned specialists know the sales process and have the necessary knowledge, expertise, and skills to help business owners score the best deal.
A broker will have insight into all the minutia
A reputable, experienced, and trusted business broker will have a transparent office address you can check to ascertain their credibility and connections with owners of similar establishments. They can give you access to prospective clients interested in investing in a restaurant and a high-traffic website where you can list your business to attract interested prospects. With that in mind, let’s see how partnering with a broker can help owners of dining establishments ensure a lucrative restaurant sale.
Add more credibility to your property listings
Brokers don’t just assist you with selling, they add genuine commitment, trustworthiness, and credibility to your efforts to complete a sale.
Therefore, hiring a seasoned broker allows you to tap into professional representation and express a genuine dedication to completing the sale process while helping you save time, effort, and resources along the way.
Make necessary preparations during the transition period
Selling a business depends on your efforts to make the necessary preparations as a seller. Interested prospects will put you through intense hardships to get what they want. The only way to deal with them and their professional advisers is to hire professional help to prepare you for the exhausting negotiation process. A broker can lend you their expertise to inform you on everything you need to know, from cooperating with the buyer’s advisers to minimize risk and tax to in-depth market analysis, projects, detailed financial models, business valuation, and more.
Educating restaurant owners
Most business owners have never managed the complex process of selling their operations. Seasoned brokers can lead them through the process and coordinate the various aspects of the transaction to move the seller closer to completing a sale.
Brokers can also negotiate with landlords, insurance agents, bankers, accountants, and legal representatives to cover all relevant points and ensure everything goes according to plan.
Negotiating the deal
Brokers excel when it comes to negotiating all major considerations of the sale, including the process, timing, terms and conditions, etc. In addition, they also know the most viable options for obtaining source financing for the prospect (in case they need it).
Fine-tune all the little details
On the other hand, a broker can ensure you obtain a new lease or a renewed lease agreement as per your circumstances and requirements. A business sale involves various considerations, such as earn-outs, seller notes, equity, and more. Professional brokers structure each sale specifically to cater to the requirements and needs of both prospects and sellers, providing options to mitigate any potentially conflicting situations.
With a little help, you’ll be able to close the sale
Listing any business for sale is a time-consuming and tedious process that requires time, effort, and resources. It can take anywhere from a few months to a year to complete the process. Thankfully, you can speed up your business sales by hiring a business professional who will focus on your needs and requirements to get you the most for your establishment. More importantly, they will help you focus on your core mission while doing all the hard work for you. Though listing a business for sale isn’t rocket science, it is an intense and long-lasting process. Hiring some professional help could benefit you in many ways, protect your business brand, and improve your chance of getting the most value for your establishment.
FAQ
What steps should I take to prepare my restaurant for sale?
Focus on enhancing the restaurant’s appearance, maintaining financial records, taking a proactive sales approach, hiring a business broker, and developing a comprehensive marketing plan.
How can a business broker assist in selling my restaurant?
A business broker brings expertise in sales, market understanding, and access to potential buyers, facilitating a smoother and potentially more profitable sale.
What are key financial preparations for selling a restaurant?
Ensure all financial statements, including profit and balance sheets, are accurate, complete, and ready for buyer review.
How important is marketing in the sale process?
Vital. A broad marketing strategy utilizing various channels attracts diverse prospects, increasing the chance of a successful sale.
What factors affect the selling price of a restaurant?
The restaurant’s financial health, market conditions, and negotiation with buyers influence the final sale price. Consultation with financial experts is recommended to set a realistic price.
Resources:
https://fitsmallbusiness.com/restaurant-statistics/
