Do you have an exit plan when it’s time to sell? Thinking about selling a restaurant is only the beginning of a process that can take 6-12 months to complete. Preparing a restaurant properly before hitting the sales market can make the difference between, receiving a solid offer from a buyer or selling at a considerable loss.
The lack of details when it comes to the presentation of the restaurant will make all the difference between a restaurant selling or not. On an average only 30%-40% of restaurants listed actually sell to new ownership.
Improve your changes of your restaurant selling by following the EATS Restaurant Brokers–How to prepare a restaurant for sale TIPS:
Tangible Items:
Back of House– Make sure all equipment is cleaned and in working condition. Clean the hood systems, service the high-ticket equipment, and CLEAN. Remove any items that are not working or can be seen as an eyesore. Make a list of any items that are leased with the vendor’s contact information with pricing and terms.
Front of House– Remove furniture, tables, and chairs that are dirty, broken, or torn. Hire a professional cleaning company to clean carpet, flooring, walls, windows, if you can afford. Remove decorations that can be seen as dated or that are dirty or broken. Clean or updated bathrooms.
Mechanical Systems– Have an HVAC company service HVAC system and keep documentation.
Non-Tangible Items: Documentation is not only needed it’s required!
Financial Books and Records- When it comes time to prepare a restaurant for a potential sale, restaurant owners need to buckle down and collect and organize financial information. Clean financial records are one of the most important factors in selling a restaurant for top dollar.
Most buyers will want to see three years of Profit and Loss statements, and year-to-date monthly profit and loss statement. Once the buyer has signed the non-disclosure agreement and provided the Restaurant Broker with proof of funds, they want the financial information ASAP. Time KILLS deals, financial documents should be prepared to share once the buyer has been financially qualified.
Professionally trained Restaurant Brokers only represent the financial information provided to the IRS and not the 2nd set of Books of Records that is unreported.
Menus & Recipes- Create a recipe manual with all the recipes and measurements to provide to the new buyer. Restaurants that come with systems and manuals are more attractive to buyers that are new to restaurant ownership.
Vendor List- Create a vendor list to provide to the new buyer. The vendor list should include all utility companies, food vendors, and other vendor’s company name, contact information, and any lease arrangements with monthly price.
Equipment List- Create an equipment list for only items that a buyer can lift and take with them if they decide to move locations. Do not include any items that the landlord owns, these items will include attached fixtures like hood systems, walk-in coolers, sinks, and grease trap.
A professional trained Restaurant Brokers can assist restaurant owners in the preparation of listing a restaurant for sale. A Restaurant Broker with help with the overall marketing package for the restaurant to be listed on the buyer market for sale.
Who has time to pre-qualify prospective buyers, educated restaurant buyers about the buying process, and help all parties reach the closing table? The answer is a Restaurant Broker!
Thinking about selling or buying a restaurant contact EATS Broker. For more information on the restaurant market and other available consulting services or restaurant valuations, contact Dominique Maddox at 404-993-4448 or by email at [email protected]. Visit our website at www.EATSbroker.com
