Restaurant for Sale by Owner listings usually try selling a restaurant business without the assistance of a Restaurant Broker. Some restaurant owners decide to sell a restaurant on their own to save on the commission a restaurant business broker charges.
The old saying is “knowledge is power,” and the art of selling a restaurant can be challenging for a Restaurant for sale by Owner. The Restaurant Broker at EATS Broker created a list of the three common mistakes made by Restaurant for Sale by Owner:
1.Restaurant Valuation: Determining the asking price when selling a restaurant is essential. The most critical stage of selling a restaurant business is coming up with the correct restaurant valuation.
Pricing a restaurant too high increases the chances of the restaurant not selling. Pricing the restaurant too low leaves potential profits on the table.
The three restaurant valuation methods are the asset-based approach, income approach, and gross revenue approach.
Restaurant Business Broker tip: Understanding the difference between a restaurant listed for sale based on earnings and an Asset Sale will make all the difference in the listing price.
Restaurants for Sale by Owner listings should consider paying a consulting fee to a Restaurant Broker to create an accurate Restaurant Valuation.
2.Lack of Financial Documentation: Owners should prepare and organize all detailed financial records when selling a restaurant. Restaurant buyers will want to see accurate financial statements to assess the restaurant’s potential.
Restaurant owners should be ready to defend the listing price with financial documentation and be willing to negotiate. Lack of transparency can lead to distrust. Restaurant for Sale by Owner listings should always provide accurate information.
3.Lack of knowledge to sell a restaurant: The average restaurant owner will only have to sell a restaurant once in their lifetime. The knowledge it takes a Restaurant owner to have a successful restaurant resale can be researched online, but overall, it’s a learned skill.
Owners thinking about selling For Sale by Owner (FSBO), the skill set to operate a day-to-day restaurant differs from selling your restaurant.
Time and Effort: Selling a restaurant is a contact sport, meaning you will have tons of buyer inquiries, questions, requests, calls, emails, docs requested, information requested, and hopefully, the buyer will move forward.
It takes an average of 6-8 months to sell a restaurant. The frustration of not selling, time commitment, and marketing fees can start to affect the restaurant’s operation.
Restaurant for Sale by Owner listings has to think if trying to sell a restaurant on their own to save on a listing commission is the right choice.
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
