J.C. Kapas Restaurant Real Estate Blog
Tips to Get the Best Price for Selling Your Restaurant
Deciding to sell a restaurant is an important decision deserving of careful consideration and planning. Whether you have been open for fifty years or not even a year, you have made investments of your time and money. Also, the hope and aspiration behind starting and growing a restaurant often makes the decision to sell an emotional one for many restaurateurs. Getting the price you want takes the edge off greatly. And even if the transaction is not emotionally charged, you still want the best return on your investment. In order to achieve this, a little preparation goes a long way.
Here are six helpful tips on how to get the best price for selling your restaurant:
1. Presentation is Everything
When planning to sell your restaurant, the first thing you will want to do is make your business is more appealing to potential buyers. If you currently don’t have your own website or social page, then building up an online presence is absolutely vital. An attractive website brings in customers, and a busy atmosphere will attract potential buyers willing to pay top dollar. Sites like Squarespace can make designing a website easy. You should also consider having a social media presence. A Facebook, Instagram and/or Twitter account are great ways to engage with your customers and market your business for little to no cost.
Another thing you should consider is making sure all of your equipment is up to date. The better the condition a restaurant is in when it goes on the market, the higher the price it will fetch. Of course, you don’t have to update everything at once, but dedicating a portion of your budget to upgrading and replacing equipment will definitely pay off.
2. Organize Your Financials
The financials are a critical piece in selling any business. Prospective buyers will likely want to see at least a year’s worth of financial records. According to professional business owners, one of the most common reasons that businesses fail to sell or sell for less than they are worth is because the owners’ financial records are inaccurate, incomplete, or poorly maintained. Properly presented finances can have a huge positive impact on a sale.
3. Understand Your Commercial Lease
If your restaurant is established in a leased space, be sure to calculate all the factors concerning the lease such as expiration date, and the lease extension option. It would be a good idea to talk to your landlord about your plans to sell, and ask them about extending the lease, since a lease that is already locked in place can provide security for a prospective buyer.
4. Know What Your Restaurant is Worth
Selecting the right price for your restaurant can be difficult; too high and you might be waiting years to sell, too low and you’ll be leaving money on the table. It is essential that you come up with a realistic and well-argued price. You should consult an expert, most often a licensed real estate agent, who is highly experienced in these matters.
5. Hiring a Broker
While you may have the experience necessary to pull off the sale of your restaurant without outside help, there are certain advantages to hiring a broker that you wouldn’t otherwise have. These brokers know where to look for quality buyers, or often already have an established network of clients and thus find a buyer fairly quickly. They know who is in the market for buying.
Another advantage not to be overlooked is that a broker can ensure that your sale preparations are kept discreet. A good business broker knows that confidentiality is of the highest importance in these types of transactions.
An established real estate firm may also be connected to other professionals, such as lawyers and bankers, who can help move the transaction along in the right way.
6. Marketing to Sell Your Restaurant
You might already know the biggest selling points of your business, or maybe this is a good opportunity to reevaluate from an outside perspective. It is important to realistically assess what makes your restaurant desirable to potential buyers.
A patio or courtyard, the potential to be a venue for events such as weddings or anniversaries, a view, a trendy location, heavy foot-traffic or a steady string of regular customers are all valuable marketing aspects.
Repairs, touch-ups and a fresh coat of paint can work wonders for your marketability and potentially add thousands of dollars to your sale price. If you have been looking at the same scenery for a while, it may be difficult to get an accurate assessment of what should be updated prior to sale. You may want to seek expert advice for this or at least get the opinion of a trusted friend. Do yourself a favor and get some great photos showcasing your restaurant in the best possible light and highlighting all its best features.