Thinking of selling your restaurant and unsure where to start? Here are the five best ways to sell your restaurant that will have you ready to go in no time.
First and foremost. Get your books in order.
Accounting is no one’s favorite task. If necessary, bring in help to get the books ready to go. Restaurants are sold on a multiple of cash flow. No matter how much you are doing in sales and no matter how great the business looks, the books and records are the key to getting the most money in the shortest amount of time.
Secondly: Interview Brokers
The number two item on the list of the best ways to sell a restaurant is to interview restaurant brokers. Have a series of questions ready to ask them to include things like:
- How many restaurants (no overall businesses) have you sold?
- How do you market my restaurant for sale?
- What is your background and experience?
- Do you have financial training, an MBA or other degree that demonstrates you understand valuation?
- Are you a Certified Business Intermediary? This designation is given to less than 500 people worldwide who pass extensive testing by the International Business Brokers Association.
Third: Inspect the Physical Space
Third on the list of best ways to sell a restaurant is to view the store with a critical eye. If you usually enter the front door, go in the back. If you usually come through the front, enter through the kitchen. Look around the space. Look up and look down. Are there ceiling tiles that are dingy and have grease clinging to them in the kitchen? Does the bathroom need a paint job?
You’re not selling a house and all pricing decisions should be based on cash flow, but buyers are critical when the store has obvious physical flaws. Take a month or so and get the store in order before putting it on the market with peeling floor tiles and cooler doors that don’t close.
Fourth: Put together an equipment list
If you’re selling your restaurant, you are selling the furniture, fixtures and equipment. Buyers must know what they are getting. These are the physical assets that transfer in the location. It is time consuming and a pain, but a list of equipment is necessary. If you want a starting point, ask your broker if he has a list to get you going. We routinely provide these as a starting point.
A few tips on generating your equipment list. First, never include equipment that isn’t working. Pull it out of the space. You’re not using it today to generate the earnings so the buyer won’t need it but if you leave broken equipment in place, they will expect it to be replaced or repaired prior to close. Also remove anything personal that won’t transfer in the sale. If the Antlers over the fireplace are from the first deer you ever bagged and you refuse to transfer them, pull them down before you list it. Once a buyer sees these items, he will expect them to convey in the sale.
Lastly: Confirm what you Owe
The best way to sell a restaurant is to understand where you’ll be when the dust settles, and the money is paid. You need to know what you owe any partners, any banks, lenders or others going into the transaction. The last thing you want to do is get a deal in place and realize you don’t have the funds to close. If you owe more than the restaurant is worth, this is not a deal killer. A strong restaurant broker can work with you on negotiating settlements and give you tips to get you out of a tough situation. Just be up front and know what the problems are before they come knocking.
These are the best ways to sell a restaurant. If you want to speak to a restaurant broker for more details, reach out to We Sell Restaurants. Our experts can help.
We Sell Restaurants® is the industry leader in restaurants for sale and a proud member of the GRA. Our mission is to sell more restaurants than anyone else – PERIOD and our name says it all. We are specialists in restaurant valuations, selling restaurants, restaurant space for lease. If you are interested in learning more about our services or want to know what your restaurant may be worth, please contact Steve Weinbaum, our Georgia Licensed and Certified Restaurant Broker, at firstname.lastname@example.org