Selling a Restaurant? Are you ready
When selling a restaurant, owners can make several mistakes that impact the experience. Restaurant Business Brokers sell multiple restaurants a year, while most restaurant owners will only experience selling a restaurant once in their lifetime. Understanding the resale process of restaurants takes years of experience.
When selling a restaurant, business owners should prepare mentally for the restaurant resale process. Restaurant sellers make several common mistakes before and after the restaurant is listed on the buyer market for sale.
Restaurant Broker -Three typical Mistakes restaurant sellers make:
- Unrealistic Expectations about selling a restaurant: Many Restaurant sellers have unrealistic expectations about the resale process. It’s different than selling a home or another business; reselling a restaurant can be challenging.
Nationally, only about 30%-40% of restaurants listed for resale will sell to a new buyer. In Texas, it’s more like only 20% of restaurants listed for sale will sell.
Most restaurants listed for sale will have to close their doors and remove the listing from the buyer market, and the restaurant tenant will give the restaurant space back to the landlord. It takes an average of 6-8 months to sell a restaurant “IF” it sells.
Selling a restaurant business is like a slow cooker, not a pressure cooker.
- Poor Financial Documentation: The fastest way to lose a buyer’s interest is to provide incomplete or inaccurate financial documentation. Sellers who decide to rush to list their restaurant for sale and don’t have good books and records increase the chances of the restaurant not selling.
Depending on the type of transaction, buyers will request several supporting documentation to review and verify. Restaurant sellers should have specific documentation ready for a qualified buyer to check. Time kills deals, and the longer a buyer waits to receive documents, the likeliness of closing the deal decreases.
Dallas Restaurant Broker tip:
Restaurant sellers should have the following documents ready before listing a restaurant for sale:
-Tax Returns 2-3 years
-Profit and Loss Statements 2-3
-Year-to-date Profit and Loss statement within 60 days
-Copy of Lease
-POS Sales Reports
-Monthly Sales Tax Filings
- Inaccurate Restaurant Valuation: This is restaurant owners’ number #1 mistake. Restaurants listed too high will hurt the potential sale; listing too low will leave money on the table.
Getting a restaurant valuation and not just a “WAG” wild-ass guess is critical!
After reading this blog, avoiding these mistakes and seeking professional advice and guidance can significantly improve the likelihood of selling a restaurant.
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 firstname.lastname@example.org. Visit our website at www.EATSbroker.com