EATS Broker provides 4 Tips for a Successful Restaurant Sale in 2024 to any restaurant owner considering selling a restaurant. Selling a restaurant can be challenging, with only 30%-40% of restaurants listed for sale selling.
Selling a restaurant in 2024 comes down to careful planning and execution. The Restaurant Business Broker provides tips to ensure a successful restaurant sale in 2024.
Prepare your Financial Documents: Buyers will want to see organized financial documents that include tax returns, profit and loss statements, sales tax filings, a copy of the lease, equipment list, and any other relevant financial documents.
Restaurant Owners should be ready to discuss growth opportunities and positive trends in the restaurant with potential buyers.
Restaurant Valuation: This step is critical to selling a restaurant. There are three different approaches to come up with a restaurant valuation. The approaches are:
Asset-Based Approach– The buyer pays the seller an amount based on the opportunity to benefit from the existing business and build out
Income Approach: This approach determines an expected level of cash flow for the business using a restaurant’s past earnings record.
Gross Revenue Approach: This method is the most uninvolved that solely relies on a percentage of annual gross sales to determine a value and is not accepted by bank lenders.
The Restaurant Real Estate Broker at EATS Broker uses the Income Approach to determine the appropriate listing price.
Fix Equipment and Enhance Curb Appeal: Ensure all equipment is in working condition and looks clean and presentable. The restaurant should not have any noticeable flaws that can be fixed or replaced. First impressions matter to buyers; a well-maintained restaurant location will attract more buyers.
Legal Compliance: Restaurant owners should confirm all sales tax filings are paid and updated, check for any UCC licenses on the business, and ensure that the business license has stayed active.
Professional Assistance: It takes a team of professionals to get some deals to the closing table. Restaurant Owners should consider hiring a Restaurant Business Broker, accountant, and Attorney to guide them through the due diligence process.
Restaurant Owners should be aware that each restaurant resale transaction is unique and has several challenges to overcome. When it’s time to sell a restaurant, seeking professional representation increases the chances of a restaurant selling.
For more information on the restaurant market and other available consulting services or a complimentary restaurant valuation, contact Restaurant Business Broker Dominique Maddox at 404-993-4448 or email at [email protected]. Visit our website at www.EATSbroker.com
