All of your blood, sweat, and tears have been poured into your restaurant, but the time has come - you’ve decided to divest ownership of your restaurant. When you’re preparing to sell a restaurant, there are a number of ways to make your business more appealing to potential buyers, ranging from cosmetic updates and repairs to improving the quality of the financial records you will provide to prospective buyers.
The scope of this article is to address financial and federal tax issues a restaurant seller should consider with the intent to better prepare the seller for a successful sales process.
GET FINANCIAL RECORDS READY
The more organized and complete financials you can provide, the more appealing you will be to quality buyers and more likely you will achieve a higher selling price. Financial records include the income statement, which is a record of income and expenses, and a balance sheet, which is a list of assets such as accounts receivable, inventory, equipment, furniture, real estate and leasehold improvements along with any accounts payable and debts on the business. These two reports are the most basic records a prospective buyer will request. Other more detailed information that is also often required will be discussed in further detail in the “Due Diligence” section of this article.