This is an excellent question for any salesperson to ask. How can I sell my restaurant better? The best way remains the quality of the information you can pass on to your future buyer. Unfortunately, this information is often lacking, and can lead to lengthy negotiations or significantly reduce the value of your restaurant. Let’s take a look at the information we’re talking about.
What information do I need to sell my restaurant?
The major shortcoming remains a glaring lack of information to pass on. This is often due to more or less efficient management on the part of restaurant owners. Your goal is to sell your restaurant at the best possible price, and as quickly as possible.
Any serious buyer will ask to see your figures. In other words, a balance sheet showing sales, operating costs, management salaries, payroll, profits and more. All this should be spread over the last 3 years. This information helps demonstrate the viability and profitability of your restaurant. I’d like to put an end to an old legend right away: if the restaurant owner doesn’t declare part of his income, he’s a winner. On the contrary.
Does not declaring income benefit my restaurant?
Not declaring part of your income today won’t do you any favors in the future. You will be penalized on the sale of your restaurant. You won’t be able to prove and demonstrate the real value of your restaurant, and you’ll be forced to sell it at a loss. By not declaring part of your income, you are breaking the law and reducing the value of your restaurant. That’s why many restaurants are still in the early stages of management, because part of the income is hidden. Personally, I would never advise a buyer to acquire a restaurant that cannot prove the source of its income. To sell your restaurant more effectively, you need the right information.
What information do I need?
Following on from this aside, let’s get back to the information that will help you sell your restaurant more effectively. This information can be divided into three main areas.
The first concerns the restaurant’s financial statements. That’s why I advise you to enlist the services of a good accountant. It’s better to pay more and benefit from sound tax and accounting advice to optimize your restaurant’s net worth. It’s important for you to be able to demonstrate that your company will continue to grow. This is why you need to provide financial statements for the last three years. This will help you speed up your sale.
The value of your equipment :
The second point concerns the value of your equipment. You need to draw up a detailed list of all the equipment included in the sale. Then you’ll draw up what’s known as a “life plan” for your equipment. These include kitchen equipment, dining room furniture, tools and other items. Unfortunately once again, many owners wishing to sell their restaurants have not done this work. The third point concerns human resources. Of course, we’re talking here about a restaurant that’s still in business. In another article, we’ll talk about the sale of a restaurant that has been closed for some time.
The value of human resources and their skills can increase the restaurant’s value. When you sell your restaurant, you also sell the skills that go with it. This is a comfort for your buyer, who can count on a team capable of running the restaurant. Especially if they’ve been with the company for several years. The idea is really to demonstrate that over the last few years you’ve implemented sound management of your restaurant at all levels of the business.
Is there anything else I need to consider to sell my restaurant better?
Here are a few other points to consider to help you increase the added value of your restaurant:
Have a website,
All derivative products
Business partners acquired over the years,
All agreements with some of your suppliers,
Exclusivity on certain products…
These are just a few examples, and we’ll have the opportunity to expand on them in future articles.
In conclusion, we can see that if you want to sell your restaurant more effectively, you’ll benefit from good management in the future. I’m often asked about sales lead times. For how long? Sales lead times will fluctuate according to the information provided. Many sales drag on due to a lack of information and, above all, stall due to protracted negotiations. How many restaurants have been sold at a certain price, only to find themselves devalued by tens of thousands of dollars a few months later?