Many restaurant owners get into the business thinking only about operating a restaurant but never an exit strategy to sell a restaurant. Getting out of the restaurant business can be a challenge for most sellers in today’s market. Operating a restaurant day-to-day operation is much different than operating the sales process for selling a restaurant.
A large number of restaurant owners try to sell their restaurant first and struggle for months to find a buyer. Restaurant ownership has two endings that are sell to a buyer and cash out or foreclose and lose everything. Find 3 Tips below to make selling your restaurant easier:
Inspect your restaurant books and records:
Selling a restaurant is more challenging than selling a home but both selling processes require an inspection. When selling a restaurant, the seller should confirm no UCC liens exist, liquor and retail taxes are paid, no pending lawsuits and filed tax returns match profit and loss statements. Nobody likes surprises when it comes to selling a restaurant addressing these items upfront can save a future deal.
The first thing to do when you are planning to sell your restaurant is to start gathering the required paperwork. The financials are always a critical piece of selling a restaurant.
Sellers should be prepared to provide buyers with the following documents:
- 3 years of tax returns
- 3 year of profit and loss statements
- A list of assets
- A copy of the lease
- Copies of inspections records
- Sales Tax Filings
- Copy of Franchise Reports (if restaurant is a franchise)
- Vendor List
Stage your restaurant for sale
The way a restaurant looks can mean the difference between selling a restaurant and closing the doors. Sellers can improve the chance of a sale by managing the things they can control training and appearance of staff, maintenance of equipment, and cleanliness. Buyers look for red flags when inspecting a restaurant to buy, a filthy hood system, or restaurant will have the buyer looking for reasons not to buy. The best way to increase your chances of selling a restaurant is to maintain a professional-looking business with high inspection ratings.
Hire a Restaurant Broker
For Sale by Owners quickly find out the majority of buyers contacting them on a daily basis do not have finances to move forward, don’t qualify for a bank loan, and don’t understand the buying process. Selling a restaurant is a unique niche market, hiring a professional Restaurant Broker can make all the difference considering the time and effort it takes to sell a restaurant. These brokers will know where to look for qualified buyers and will have the best understanding of the marketplace.
Another advantage not to overlook is that Restaurant Brokers are specialized Restaurant Business Brokers only working with buyers looking for restaurants for sale. Everyday Restaurant Brokers are analyzing profit and loss statements, pre-qualifying buyers, negotiating lease terms with landlords, and writing Asset Purchase Agreements. It takes an average of 6-8 months to sell a restaurant, and an average of over 50 buyer inquiries before a restaurant is sold.
Restaurant Brokers usually only get paid a commission if they sell a restaurant. They will pay for all the marketing costs, pre-qualify buyers, schedule buyer meetings with sellers all for the opportunity to sell a restaurant.
For more information on the restaurant market and other available consulting services or restaurant valuations, contact Restaurant Business Broker Dominique Maddox at 404-993-4448 or by email at [email protected]. Visit our website at www.EATSbroker.com
