Books, books books! - Anyone who has ever owned a business is accustom to the term, "muti-tasker". When you own a restaurant, you're a multi-tasking genius. It's about putting out fires, not literally (hopefully!). Unless you have a P.O.S. system and a book keeper, the last thing you care about are the books.
Most owners I meet care there are enough funds for the payables in the account but that's about as far as it goes when it comes to knowing what the cost are and where the income is coming from. Now if you do have a P.O.S. system then it's very easy to know when the peak hours are, peak days, beer sales verses wine etc"¦ If you don't have one then you will have to sit down and really become familiar with what's going on in your restaurant from a numbers and income perspective.
I've sold hundreds of restaurants and I've never meet a buyer who didn't want to know about the books. I won't tell you that every restaurant I ever sold had great books and records/financials but I will tell you that the restaurant owners who knew and were very familiar with their operations costs and trends were most likely to get the maximum for their restaurants and they sold quicker. It might surprise you to know that 80% of the restaurants I sell are to people with no prior restaurant experience. They are not only buying your restaurant they are buying your experience so the more organized you are, the more perceived value in the purchase.
Perfection is not necessary - If you are under the impression that your business has to be perfect before you sell it, you are incorrect. Buyers want to buy a recipe for success, however they often think that they can do it better than you. Who knows maybe they can and maybe that can't, the possibility is what allows them to dream of becoming the most successful restaurant owner in the county. It is important that you've created a solid foundation for them to build on but it's perfectly fine if the business has room to grow.
If you think about from a buyer's perspective then you realize that they just want to bring their talents to the table. For instance, a buyer might not have a strong restaurant background but they have a great marketing background. So they will need to learn about the restaurant business from you but they can really shine when they go to market the restaurant for sale. The point is, don't be intimidated to admit your imperfections. They will actually help foster the dream of the buyer that he/she can do it better than you and they need to believe that in order to buy your restaurant.
Licenses & More - When I meet with my sellers I give them a check list of documents that I need. Do yourself a favor and make a file of all the things that a business broker or buyer would ask you for. You will need to provide a copy of your liquor license and all the conditions that go with the license. Copy health permits, inspections, business license, unsecured property tax bill, any leased equipment (dishwasher & CC machine), quarterly sales tax, copy of fictitious name statement and a copy of the lease. If you have a corporation, find the articles of incorporation and the statement of officers.
The more prepared you are for a buyer and a broker, the more interested they are to work with you.
Check yourself out - These days the internet plays a huge factor in the restaurant and bar business. There seems to be a new review website every week. The buyer is buying "goodwill", I have many sellers that are surprised to hear some not so positive reviews about their restaurants. I highly suggest Googling your place and seeing what comes up. Often owners are unaware of what is being said about their place.
This might give you a chance to make some corrections in service, staff or even the food. Occasional criticism is normal in every restaurant. You can never control all of the people, all of the time. Some people are just having a bad day but if there are too many bad reviews then you have to do something about it. Sometimes you can respond by inviting them back with an apology.
The ratio is what's important. Some review websites won't help you remove the reviews unless you sign up as an advertiser. It isn't fair but the only other thing you can do is encourage patrons who really like your place to take the time and write a review. These days, the first thing a business buyer will do is check you out on the web.
Find a Broker Who Specializes in the Hospitality Industry - Most business brokers are jack of trades. I also sold many different types of businesses but after a while I realized that my interest was in the restaurant and bar industry.
I completed over 200 transactions in just restaurant and bars, and they do take a special understanding to sell successfully. When you sell one type of business, you create a huge network of buyers, sellers and support for the sale that understands the restaurant industry. When you interview brokers and agents make sure they have a solid marketing program to sell your business. There's marketing and then there's marketing.
My advice is simple, you've undoubtedly worked very hard in your business. Pick a broker that works as least as hard as you do, but at selling restaurants. You deserve the best price the market can fetch for your business. Experienced restaurant brokers know what your business should sell for beyond the books and records. Working with the right business broker will get you the right deal.
About The Author: Christina Lazuric, CBI is a Principle and Broker at My Restaurant Brokers. Christina has brokered hundreds of Restaurants, Bars, Food Franchises and food related businesses. MRB has the experience and buyer database to find the perfect buyer for your Restaurant or Bar. Serving Orange County & L.A. County, Christina can be reached direct at 949-257-7823 for any questions or having a consulation regarding buying or selling a restaurant.
Categories: BizBen Blog Contributor, How To Sell A Business, Selling A Business