To successfully sell your restaurant business and achieve the highest price in the most efficient way possible you need to understand how the prospective purchaser is thinking, and what they’re looking for in a new business.
The sale of a restaurant business takes around 6 months on average. So, you’ll need to stay committed to the process and keep your establishment in tip top condition with your staff on top of their game until your buyer signs on the dotted line.
Look at these 5 steps to readying your restaurant for sale.
A prospective buyer will be very interested in the reputation of the restaurant, and this is largely built on the culinary skills and consistency of your head chef.
A great chef that is both a culinary artist and an excellent manager will be the cornerstone of your success. Not only will the food be sensational, but your kitchen will be managed smoothly. And, if your back of house runs like clockwork and you consistently produce top quality food and service, you’ll impress any potential buyer.
If you haven’t got a great head chef already, consider whether securing a new chef would put you in better stead to sell your restaurant.
This is, of course, easier said than done, but don’t just restrict yourself to local talent. Think about widening the net. There is a great pool of talent via 457 visas that come in highly skilled, tested and guaranteed to stay with you.
Employment in the hospitality industry can be very transient, so in addition to skills, it’s likely a prospective buyer will be interested in the loyalty and attitude of your key staff. A guarantee that the chef will stay may give you an edge over other establishments your buyer is considering.
Do you manage the restaurant yourself or do you have a management team?
Whether you need management to make your establishment attractive to buy will depend on the sort of business hours you operate. If you’re open from breakfast until dinner every day, this might not appeal to a buyer looking for a revenue source rather than a 100-hour working week.
Alternatively, if you are only open for dinner a few nights a week, having a management team may be cost-prohibitive.If you work long days, new buyers might be turned off by the number of hours they’ll need to put in to run the business, as well as the added hassle of hiring their own management team. So, it might work for you to have a management team on board for the sale.
This is where selling a restaurant is like selling a house. Presentation and representation is everything.
How your business is being represented by your staff is very important. Savvy buyers will often visit your restaurant as a paying customer to size up their potential investment.
They’ll be interested in how the staff work together and operate, and how the food tastes.
Hiring new staff is an additional hassle and cost they might not be interested in taking on. So your staff will need to be at the standard of service and food quality that a new owner would want to employ.
While you’re selling your restaurant, keep investing your time in maintaining excellent staff and training, ensuring the quality of your food doesn’t suffer, and your chef is prepared for the changeover.
Your establishment needs to be well maintained and in excellent repair. Décor must be attractive and furniture in top condition.
Décor must be attractive and furniture in top condition. What is the condition of your kitchen equipment? Is everything functioning and working properly?
Take care of any equipment upgrades or replacements before going on the market. Everything from refrigerators and ovens to air conditioning and heating systems will need to be assessed.
Most potential buyers will be turned off by any functionality issues in your kitchen. The less work for the new owner, the more buyers you’ll appeal to.
This is the time to streamline and clean up all your financials and tax records.
A potential buyer is likely to be applying for finance to purchase your restaurant. To do this, they’re going to have to supply their bank with clear financial reports of your business’s revenue.
A complicated, messy, and inaccurate financial reporting system will compromise the buyer’s potential to be financed. It’ll also prevent some buyers from even making an offer. You’ll want to maximise the pool of possible new owners, so squeaky clean books are vital.
This is also a good time to ensure your lease agreements for the premises and any equipment are current and can be transferred into the new owner’s name with minimal obstacles.
Keep investing in your customers and continue to seek new business.
If you run a Facebook or Twitter account, keep it active and busy. Continue to offer deals and specials. Show your new buyer that this business is a going concern.
If you don’t already have a customer database, consider setting one up. Having repeat and new customers signing up gives your new owners a captive audience to market to. Another feather in your cap.
In short, you’ll need to show your buyer that your restaurant is increasing in popularity and it already possesses the right marketing strategies.
You want a buyer as quickly as possible for the best price possible. Consider whether you could use a business broker to sell your restaurant on your behalf.
They will already have the appropriate marketing resources available to them and have access to a pool of potential buyers. Their industry experience and networks could save you time and money.
This would free you up to focus on keeping your restaurant in pristine condition and readying it for a quick sale.