The restaurant industry isn’t always the kindest to entrepreneurs, and many find that after a successful (or unsuccessful) foray into the world of food service, it’s time to put down the apron and menus and sell their restaurant for a nice profit. Whether you’re looking to leave your restaurant because of financial strain or simply seeking a new entrepreneurial venture that requires more of your time, selling your business involves these essential strategies and tips.
1. Understand How Much Your Restaurant is Worth
Buyers and investors will want an in-depth rundown of financials, whether those are positive or negative. If you’ve just decided to sell your restaurant, give yourself time to get all of the financial data together, and bolster your profits and business offerings in that time. Buyers will want to see quality sales and a steady cash flow. It’s important to convince buyers of the quality and potential of the business, so it’s in your best interest to augment sales and reduce expenses to strengthen cash flow before listing your business. The average restaurant sale can take upwards of six months, so you do have a window in which to expand upon your profits and determine areas in which you could cut costs to come out on top.
When it comes to your assets it’s important to understand the depreciation involved. From state-of-the-art food service equipment to your company’s technology options, everything depreciates the moment it’s purchased and installed. This may set your overall assets value at a lower price than initially anticipated, so it’s important to do your research and understand your exact worth when reporting to a potential buyer.
2. Selling Off a Liquor License
Even if your restaurant is going out of business, you’ve got some valuable assets to your name. A liquor license is possibly one of the most lucrative, depending on your location. If your restaurant will be closing its doors, your license will be deemed inactive, but it can be sold to a looking buyer. Some choose to use the services of liquor license brokers like License Locators, Inc., because it takes the stress out of finding the right buyer. While you do pay a fee to these providers, it’s often worth the investment as they can help you garner a fair price in your current market and make sure the sale is legally sound.
3. Use a Restaurant Real Estate Specialist
When it comes to listing and finagling a deal with a potential buyer, it’s in your best interest to use the help of trained real estate and business brokerage professionals like aptly titled company We Sell Restaurants. Brokerage professionals are specialists in the field, with insight into where the market is currently and where it will be, they know how to locate the best buyers, and understand the restaurant business, which can come in handy if you plan on selling your business as an operating entity.
4. Vamp Up Curb Appeal
Just as you would do if attempting to sell a home, it’s important to ensure the exterior of your business is appealing and inspires potential buyers to take a look inside. Physical condition is just as important as financial condition. Hire a professional painting company to revamp the paint job indoors and outdoors, and be sure to clean and replace any broken windows. Keep trash off the curb and out of sight, and when it comes to the interior, stage the space in a way that will allow potential buyers to imagine its utility for their purposes.
5. Sell as a Commodity
Is your restaurant thriving? Do you have a loyal staff on the roster, all the furniture still intact, and a consistently filled reservation list? It may be a better idea to sell your restaurant as an entire asset. For buyers looking to use the space as a restaurant, it may be more enticing to invest in an established eatery with great wait staff, a solid menu, and loyal customers already in place.
If you’re looking to sell your restaurant business, understand that the process may be long and involved. With these tips and strategies, you’ll be poised to make a profitable sale.
Bob Adams is a serial entrepreneur and founder of BusinessTown.com.