Selling a restaurant or a café is a bit more complicated than selling a business in general. You have to go through a time consuming process to come up with a flawless exit plan. A restaurant owner should start the selling process at least six months before the expected sale. It may take less time, but it is better to prepare early to achieve the best possible price for your business. Here are some issues that you have to address before you can sell your restaurant.
Related: How it works to Execute Your Own Business Sale in 4 steps
1. Presentation: When you are thinking of the sale, first thing you should do is to make the restaurant more appealing to the potential buyers. Make sure all the equipment is up to date and in perfect working condition. The décor of the dining area should be attractive and the kitchen and bathrooms should be spotless. Your staff should be knowledgeable and helpful to the customers. Be aware that serious buyers often visit your restaurant as a regular client. Make sure outside of the restaurant is clean and safe for the customers.
Another thing you should do is to boost up the online presence of your undertakings. If you haven't got your own website or social page then build an attractive one and update it regularly with promotional offers and discounts. Your restaurant should be full with customers while you are looking for potential buyers. A consistently busy atmosphere will make your place alluring to the buyers and they will pay top dollar for it.
2. Prepare a financial profile: A professional way to prepare for the selling process is to develop an organized financial system for your business entity. You will attract quality buyers by keeping a detailed record of income, expenses and other financial statements. Keep at least a year’s profit and loss statements of your company for your buyers to evaluate. List your inventory and other assets such as specialized equipment and furniture. Keep food waste cost and cash sales records. If you have any debt, mention that to your buyers. A detailed financial record will impress the potential buyers and improve your chances of selling the business at a higher price.
Related: What is Your Motivation for Selling the Restaurant
3. Set your Asking Price: You need to come up with a realistic, well-argued price for your restaurant. Obviously, you have emotional attachments to the business, so don’t set an overpriced offer and scare away buyers. You can’t set an underpriced offer either. If needed, make use of the valuation tool or ask for professional help to determine the Asking Price. This way the price will be fair to you and the potential buyers.
4. The lease issues: Before you can start the actual selling process, look into the lease issues. Do you own all the expensive kitchen equipment or is it leased? If your restaurant or cafe is established in a leased space, calculate all the factors concerning lease such as expiration date and the lease extension option. To continue the profitable restaurant business, new buyer probably stay with your current lease. Discuss with your landlord about the status of the lease and clear any obstacles that may arise with the change of ownership of the restaurant.
Related: How to Sell a Business With Lease
5. Hiring a business broker: Hiring a specialized business broker is totally up to you. In today’s market there are several options available for you to advertise the sale of your business, like social media, word-of-mouth and online business-for-sale platforms. Business brokers, i.e. those specialized on restaurants, have an established network of potential buyers, so they may be able to find a buyer fairly quickly, but downside is that you will get less from the sale as the fees of the brokers are quite high, between 10%–25%. My advice will be: first, try to sell your restaurant by yourself. If you completed the above steps then you are halfway there already. After all, you have successfully managed your business for years, and you can run it for another few months. You just have to add a few more tasks into your to-do list, such as setting up and updating business-for-sale listings, making a few inquiries and qualifying potential buyers.
Related: Is your Business Saleable?
Top Questions Restaurant Buyers Ask
There are any number of questions a restaurant buyer may want to ask. Check the video below. These 10 questions will help get you prepared.
Jon Hunt, an experienced business broker in Florida, addresses the top 10 questions restaurant buyers may ask from the owner.
You started the restaurant because you saw the potential in it. Now it’s your turn to highlight the same potential to your buyers. It will take a decent amount of time and effort from you, but if you follow the right process, you will be able to sell your business with a good return.
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