Every one wants to get top dollar for their business, but did you know that most people don't know how to go about insuring that this happens? Here are steps you should take to help you get the highest possible price.
1. WHAT'S A FAIR COMMISSION? This question is always near the top of every restaurant and bar owner thinking of selling. The mistake made is to believe all brokers are created equal, that there is no difference in the services each broker provides. This couldn't be any further from the truth! A good broker adds value to the business' price and transaction. A good broker will do their homework on your business and learn it inside and out. They gather information such as financials, ask questions, research the web for good and bad reviews, and they eat and drink at the the business several times to experience the good and the bad of the restaurant. Then they prepare a detail financial analysis trying to find all the add backs to put the restaurant in the best possible light. Buyers today want profit, plain and simple. Then the broker will write a quality ad to attract a buyer's attention that's enticing and packed with information. So many broker believe they ought to write one or two sentence to attract buyers. But frankly, they do this because they know little about the business.
At SellingRestaurants, we're trained to dig into your business and find the nuggets of gold, getting you the highest possible price.
2. WHAT CAN THE OWNER DO TO HELP SELL THEIR RESTAURANT OR BAR? Your restaurant or bar is no different then a home. When selling a home, one makes sure it is clean, organized and well presented, helping insure the property will get top-dollar. I happen to own a number of homes and when I sell one I always get the home staged, meaning I have an interior decorator come to the home and place furniture and fixtures around the house to improve the visual effect. And every time I set the new high price in the neighborhood. Although one isn't going to stage their business, they do need to clean it, repair worn furniture, paint where needed, steam clean the kitchen, rid the restaurant of bad odors. Every dollar you spend doing this will certainly return far more when a buyer visits the location.
At SellingRestaurants our agents are trained to walk through your restaurant pointing out areas that need improving.
3. HOW DO I PRICE MY BUSINESS? The worse thing a business owner can do is over price their business because buyers are like sheep - when a new business is released to market they travel in herds from business to business checking it out and once they determine it is over-priced, they never come back - NEVER! So losing buyers because you've over-priced the business is death to the ability to sell it. A good broker will certainly explain this to you and give you their honest opinion about value. If he or she takes the listing when there is a huge price gap between what the broker thinks it is worth and what the business owner thinks it is worth, then the broker is merely looking for listings and showing how inexperienced they are.
At SellingRestaurants we've sold over 550 restaurants in 12 short years. We're experts at determining a restaurants' value.
4. SHOULD I KEEP GOOD BOOKS AND RECORDS? The answer is simple, YES! So often the temptation is so great to skim cash from the business, pay employees under the table, not pay the state its sales taxes collected and owed, that the owner has basically made all the goodwill vaporize. And for what, to save a perhaps 10's of thousands in taxes? Yet this same owner wants to get top-dollar for their business, really! From a buyer's prospective, if an owner is willing to lie and steal from the government, well why would a buyer trust anything the business owner says. They won't! In the brokerage business, when faced with such owners, we always tell the owner, you've already been paid for your goodwill by the taxes that weren't paid. This is an asset sale now. So if you really want to get top-dollar, then keep good books and records for at least a few years. You'll be able to sleep better too!
Mel Jones is one of the premier restaurant brokers in the nation having published hundreds of articles on buying and selling a restaurant and bar business, selling thousands of restaurants in CA., WA and AZ and building one of the most copied business models in the brokerage industry. Mel started SellingRestaurants in 2004 with the one simple concept, give the buyers the information they need to make intelligent buying decisions without being pestered by a broker or hiding information, prepare the business for market by researching key details that make or break deals and educate the buyer on the buying process to create an intelligent buyer. Prior to SellingRestaurants, Mel was a Chief Financial Officer for Universal Music Group, the largest music company in the world. There he participated in more than $11.5 billion of merger and acquisition transactions. He also work for top companies such as Nestle Foods, USA. He hold a Bachelors in Business Administration Finance as well as attened Law School at Gonzaga University. Give Mel a call at 480.274.7000 or e-mail him at [email protected] if you have any questions.