How do I Prepare My Restaurant For a Sale?

restaurants for sale

Introduction : 

Every restaurant owner thinks about selling at some point in time. However, selling a restaurant is not as easy as selling a house or a car, even if it is a huge success and there are lineups of customers waiting at the door. Making a transaction might take several months, so planning a whole year can be beneficial. There is more to knowing how to sell a restaurant than merely organising your paperwork and replacing a few items. To get your restaurant in shape to sell and fetch a price that will make you pleased, you will need business expertise, marketing savvy, and occasionally even professional assistance.

You will most likely have your work cut out for you if you have decided to restaurant for sale, or if you are at least seriously considering it. If at all possible, begin planning a year. This will allow you to have your finances in order, make any necessary upgrades, and project consistent or even rising sales to draw in more customers and enhance the attraction of your restaurant to potential purchasers.

Steps to prepare for the restaurant for sale: 

1. Gather all Important Documents –

When you decide to sell your restaurant, the first step you should take is to start gathering the necessary documentation. State-by-state variations are possible, but generally speaking, you need to gather the following paperwork:

  • A list of your assets
  • A copy of your lease
  • Copies of any applicable licences (liquor licences, sidewalk patio permits etc.)
  • Copies of health inspection records
  • Copies of architectural plans
  • Copies of your financial statements
  • Copies of other important financial documents

Copies of each of these items may or may not be required by potential buyers, but you will probably later require each one to complete the transaction.

2. Prepare Your Financials –

The financials are always a crucial component when selling a business. We are, after all, in the business, at least in part, to make money! A year’s worth of financial records should ideally be shared with potential buyers; ensure that these records are as precise and well-organized as you can. Financials can comprise cash transactions, profit and loss records, bank statements, tax paperwork, and an inventory of furniture and other assets. Another reason to prepare this portion well in advance is the significant influence that well-presented finances may have on a sale.

It is also your responsibility as a seller to disclose any liabilities, like debts, overdue taxes, impending repair expenditures, etc. If buyers discover a surprise they do not like after signing on to the contract, they could find themselves in court for neglecting to accept responsibility.

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3. Understand Your Commercial Lease –

Is there an agreement of lease in place at the location of your restaurant? You must understand the terms of that contract before initiating the selling procedure. Your landlord has the authority to stop the transaction if you are misinformed about the specifics. Now is the time to consult with an attorney who can assist you in comprehending all of the terms and clauses so you can be sure that you are selling your property following the law.

In the best-case situation, you may discuss your intentions to sell with your landlord and request to extend the lease. For a prospective buyer, security can be provided by an existing lease, particularly if it is locked in at a fair rate. It might also give your landlord a little relaxation.

4. Selling Your Restaurant Through Marketing –

It is time to start thinking about restaurant marketing once you have overcome the paperwork challenge. You may be aware of key selling features of your company already, or this could be another chance to examine things from a different angle.

5. Know your reason for selling –

A prospective buyer may inquire, “If it is so great, why are you leaving?” after you or your broker has explained to them what a fantastic chance it is to purchase your restaurants. It is always a mystery to buyers why a successful restaurant owner wishes to sell. As a result, you should rehearse your selling point and be ready to explain it in full to each prospective customer.

6. Compile a list of possible buyers: 

The majority of restaurant servers are millennials. Make a list of other ambitious single-unit and multi-unit owners who wish to expand. The simplest way for an operator to expand and add units is through your brand. Older millennials who are ready to go it alone are another set of possible buyers. While not exhaustive, this list might serve as a solid starting point for brainstorming with your trusted experts. Every buyer will search for businesses with excellent systems and a track record of cash flow. They try to acquire businesses where they can increase ROI and make improvements.

Final Thought : 

The most crucial thing to keep in mind when trying to sell a restaurant is to approach a potential deal planned. Tell yourself the truth about the reasons behind your consideration of selling. Verify that the restaurant you offer is the greatest one you can afford to list. Determine the true worth of your company. Conduct a brief market analysis to see who could be willing to purchase. You can make everyone who is involved in the agreement happy that they went through with it if the time comes and the price is reasonable.

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