Articles about business

Selling a restaurant takes a lot of work, and more often than not, the seller has to be very careful to list in such a way as not to alert employees. The best advice for a person looking to sell a restaurant business is to seek the professional help that can make the process a lot easier. In the meantime, here are some great tips for selling that will make life a little simpler for everyone involved in the process.

You need to have a strong focus on the basics that will be appealing to the buyer. Make sure the bookkeeping is clean. A set of financials that is organized and understandable is critical to any restaurant sale. It is tough to sell a restaurant that is not profitable. Make sure the inventory levels and costs such as labor, food and beverage, are all in order. Your location is important as well. Examine whether your present lease or terms of the real estate give the buyer enough profit at month’s end. If everything is in order, it makes it easier to negotiate the desired selling price for a restaurant when the time comes.

Be objective, is the restaurant and street appeal up to speed? Do you have adequate staffing and parking? Covering all the bases is critical; otherwise, it may appear to the buyer they are being sold a “job”. In short, look at the whole process of selling a restaurant from the buyer’s point of view.


Get the Appraisal Done


The appraisal will help determine a restaurant’s true cash flow and determine what is a fair amount for the selling price for a restaurant. Totaling of the assets should include goodwill and any future business potential. Comparable sales for either singles restaurants or chains with multiple locations can be analyzed for seller or buyer. Everyone has a different perspective of what a property is worth—and it is usually the tax assessor that comes in at the high end of the scale.


Define and Target the Buying Market


You should endeavor to find qualified buyers that are capable of acquiring your restaurant. The technique involves first identifying—and then screening to verify financial strength and business experience. Business buyers are an excellent place to mine for prospects. A second great source for selling a restaurant will be the people that have available funds to invest. The aging population is a great place to put out the feelers. These potential buyers are like diamonds—they may be hard to find, but the effort is well worth it when looking to sell a restaurant business.

Employees can be a surprising source, however, a drawback is that many employees may not have the capital necessary, and the owner may have to carry more paper than they are comfortable with. While employees can be a risky bet, competitors and direct supplies are even riskier. It is vastly unlikely that they will end up going through with the deal, or place a fair market price on the table. It is more than likely they will be window-shopping and gathering competitive information on your restaurant.


Discrete Advertising


You will no doubt have privy to a lot of information concerning the many facets of how to sell a restaurant. It will pay big dividends to advertise your business correctly, and making the sale known prematurely can end up poisoning your efforts. There are many places to list your restaurant business for sale, both on the internet. The challenge will be to run an ad that will create interest without tipping off who you are. Confidentiality is important—but you also want to avoid the image of having the business look shop-worn. This can happen if the restaurant has been advertised over a lengthy period. Besides, if you choose to work with an advertising venue whose forte is selling a restaurant guide and listing your business—you will want to be head and shoulders above other restaurants thrown in the mix.


Qualifying the Buyer


It is important to have a system in place that can qualify a buyer when selling a restaurant or multiple unit chain. Many owners prefer not to contact the buyer directly. A reliable second party can gather all the necessary information including financial ability, motivation, and overall interest level before any of the details about your restaurant business are given away.


Closing the Deal


It is not bad advice to seek an attorney out who specializes in restaurants. He or she can eliminate the red tape, which can cause the sale to fall through at the last minute. All the legalities can be addressed—and this will benefit both buyer and seller.


Financing the Sale


There are a lot of choices to look at besides outright selling your restaurant. You may want to consider leasing the business, re-structuring the debt, expansion capital, equipment leasing, and even interested investors that include family members or friends. Whatever the route you choose to take; proper planning will keep you competitive throughout the venture.