If you are considering selling your restaurant you probably have many questions. Strategic Business Brokers Group licensed brokers have over 30 years of combined experience and are here to help you along this journey. Strategic Business Brokers Group will help fill the need for quality service that exists between the banking and real estate entities for the sale of your restaurant. With the right approach and proper support, you can sell a restaurant at a price that suits you in almost any market.
HOW TO SELL YOUR RESTAURANT
The first step any restaurant owner needs to take is knowing when it is time to sell. Ideally, you want to start your exit strategy 2 to 3 years in advance. During those 2 to 3 years get your financial records in order. Having your financials from at least the past 3 years will be helpful in determining an opinion on the value of the restaurant and what a fair market price will be.
Often, in my experience, restaurant owners tend to value their business based on what a friend told them about another restaurant or what another local restaurant recently sold for. There is not a standard way to value a restaurant because they are all different. The best approach in determining a sales price is to have detailed profit and loss statements for the past 3 years and meet with a reputable business broker with experience in the restaurant market. This will help in determining a competitive asking price for the business.
DETERMINE YOUR SALES PRICE
It is important to understand that a restaurant will often be valued based on your discretionary earnings which are pre-interest and pretax profits before non-cash expenses, non-related income expenses and any one-time investments. The amount of discretionary earnings will show how attractive the opportunity is to a buyer and the sales price. Having accurate financial records will help in securing an accurate valuation of your restaurant.
MAINTAIN YOUR EQUIPMENT
The next area of your business you need to have in order is your equipment. The quality of the restaurant equipment and the appearance of the space is one area that often goes unchecked during the selling process. To fix this, keep the kitchen and front of house areas clean. Buyers often draw conclusions based on the cleanliness of a restaurant. The idea behind this thinking is if the seller was careless with keeping the space clean then how clean can their books and records be? It is also difficult to get a premium sale price when a buyer tours your restaurant and immediately sees extra expenses needed for new equipment to get the restaurant operating as fast as possible. You may not need to invest in new equipment before selling. Simply maintaining the equipment you already have will suffice. If a piece of equipment does need replacing this will need to be disclosed to the potential buyer.
MANAGE YOUR REVIEWS
Finally, you need to manage your online presence. Buyers will do their due diligence and research your business online before setting up a meeting to discuss buying your restaurant. During the 2 to 3 years preparing to sell your business work on getting new 5-star reviews. Getting new positive reviews will build up the goodwill of the restaurant and drive down past negative reviews, if any.
Getting in touch with a professional business broker will help you in your journey to sell your business. Contact Strategic Business Brokers Group at 480-284-4998 or Click Here to find out if it’s the right time for you to sell.