Most restaurant business owners do not think about selling their restaurant until they have a need to do so. At My Restaurant Brokers, we recommend to restaurant owners that they take the time to consider the reasons for wanting to sell, so they won't regret the decision at a later date.
Retirement -- One of the best reasons to sell your restaurant. Planning for this event provides a business owner with the knowledge that they will have the best possible structure that will provide for the lowest tax impact and the ability to achieve the best value.
Illness -- Unfortunately, this is the worst reason to sell, but also the most difficult to control. If this does occur, using a professional team to sell or run the restaurant can help the business owner and their family get through with the best possible outcome.
Capital -- Both the lack of capital and the need for capital to grow can cause a business owner to consider selling. A company may be restricted to the opportunities they can work on due to the need of a specific piece of equipment. There are several methods to fund this type of need, but the first step is to outline a business plan to show the value that can be created by the addition of the equipment.
Partnership Disputes -- When partners disagree, especially when they have been life and business partners, the restaurant can quickly suffer from the lack of focus on the day-to-day needs of the business. When the differences are not reconcilable, it is important that the partners find a way to work together to sell the business at a fair price.
Burnout / Boredom -- Owning and running a restaurant, especially as it is growing, means putting in a lot of time. It is not unusual for business owners to work 16 hours a day. Many miss out on personal time with family and friends and stop all non-business related activities. We recommend that owners experiencing either boredom or a burned out feeling take time off from the business. Take a short trip, take the time for a course, and take the time to attend a personal function. Then reconsider if selling is the right answer for you. Many owners find that when they have re-directed some of their energy from the business into non-business activities, they wind up re-energizing their business spirit.
Failing Business -- Restaurant owners begin their enterprises with the optimistic expectation of success. No restaurant owner ever planned to fail. However, tough competition, economic factors, departure of key employees, loss of large accounts, or the owners own momentum can all affect the success of the restaurant. This can be especially difficult if the owner has most of their personal equity tied up in the restaurant. If there is a viable business plan in place, there are many steps that an owner can take to maintain or re-create the success of the restaurant. Selling is just one option.
Selling your restaurant for the wrong reasons, can affect more than just the loss of the business. If you sell without getting enough to retire on, then you may end up looking for a job where you will make less than if you had kept the business.
Selling for the right reasons, and taking the time to do it properly, will help you achieve the outcome you desire. The right business structure, the right buyer, and the right time, will provide the best situation to obtain the best value.
It is important to plan ahead. Take the time to consider why you are selling and then take the steps to prepare for the sale. Too many restaurant owners fail to plan ahead and then are forced to sell quickly, with unwanted consequences.
#photo#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
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