Perhaps the most famous bar in America is Cheers in Boston. The Cheers sitcom made the establishment more legendary than ever, portraying the ideal bar of people’s imaginations.
You understand how incredible that environment can be if you’ve ever owned a bar. But, just like Sam Malone, you may decide it’s time to sell your bar.
However, selling a bar is not as easy as it may sound. It requires a lot of work on your end, as you have to make sure the bar is a worthwhile purchase for a seller.
If you’d like to sell your bar business but don’t know where to start, don’t worry! In this guide, we’ll give you the essential information you need about how to sell a bar.
Preparation For Selling a Bar: Collecting Financial Records
When selling a bar, the first step is to get your affairs in order. First, collect your financial reports. The first thing any prospective buyer wants to know is that your bar business generates a profit.
Your financial reports alone won’t be enough to impress a buyer. You may not mind keeping all of your receipts in a small locker, but most buyers will be unimpressed with such a system.
These days, most businesses store their information in computer-based accounting systems. Start transitioning your books to electronic recordkeeping systems; this way, a buyer can trust that you store your records efficiently. In the mind of your prospective buyer, this means they won’t have to install an entirely new system right away.
Make Sure Equipment Runs Well
Another thing to do before you sell the bar is to ensure your equipment runs as it should. Even if you don’t use the equipment, it’s best to fix it or remove it. Having defunct items in a bar is a significant turn-off to prospective buyers.
As you examine your equipment, it’s also wise to remove any item that’s not a part of your sale. Over the years, you’ve likely accumulated personal items and memorabilia that make the place feel like home.
However, buyers assume that anything they see in the bar is a part of the sale. If you don’t want to part with these items, it’s best to move them out before buyers see the premises.
Iron Out Leasing Issues
When buyers see your bar, they expect to run it in its current location for the foreseeable future. However, for that to happen, your bar needs to have a viable lease.
If your lease runs out in a few months, or even in a year or two, it can halt the buying process. The buyer may not want to invest in a bar that they can’t guarantee will remain in place.
In many cases, this results in buyers turning their attention to more secure locations. So, before you talk with any buyers, make sure the lease still has plenty of time left on it.
Make Any Necessary Staffing Adjustments
This step may be the most important step in your preparation. Often, bar owners have strong relationships with their staff — you’ve come to see yourselves as a team.
However, a buyer doesn’t care much about your bar relationships. They want to know that your staff can run the bar smoothly and efficiently. If the answer is no, they may not buy the bar.
Alternatively, they may fire your staff without much mercy. So, if you have staff that underperforms, it’s in your best interest to let them go. If it comes from you, they may have an easier time recovering.
Interview Brokers and Choose Your Representative
The next step is to find a representative for your bar. This firm serves as the middle man between you and the buyer, relating information to both parties.
Perhaps the most critical service that brokers offer is valuing a business. When you interview brokers, it’s essential that you ask each candidate how much they believe your business is worth.
Generally, most candidates will give similar appraisals for your business. It’s often in your best interests to avoid outliers in these appraisals.
How do you know you can trust a representative in valuing a bar? It helps to check their credentials, such as the following:
- How many years have they spent in this business?
- What was the representative’s business background before selling restaurants?
- Are they licensed?
- How many restaurant listings do they currently have?
- How many restaurants have they sold?
- Do they have prepared contracts for buying a business?
- Do they have any references you can contact?
If they can answer all of these questions favorably, you can likely trust their judgment in valuing your business. From there, you’ll move to the next step.
Signing the Listing Agreement
Once you sign the listing agreement, follow these tips to help the process go more smoothly. First, run the bar as though you weren’t selling it. Don’t begin reducing hours or making other significant changes.
Likewise, keep the establishment clean and open for showings before and after hours. Return any phone calls or emails from your broker as soon as you can and check in with them for buyer feedback.
Review and Accept Offers
When it’s time to accept an offer you like, remember to work with the buyer. Give them a few wins in negotiations if you can handle them. Likewise, grant them the freedom to inspect the bar for health purposes.
Make sure your CPA is on board to offer any due diligence information as well. Lastly, we cannot stress enough that you shouldn’t make significant bar changes while under contract with a buyer.
If everything comes back favorably, all that’s left is to attend the closing and collect your check. At this time, you’ll turn over any keys, codes, and passwords to the new owner.
Start the Process of Selling a Bar
Selling a bar can take time. If you’ve determined to sell your establishment, start preparing today! Begin by collecting your financial records and making any necessary adjustments with the equipment.
Once you’re ready to find a representative, consider our services! We offer top-notch representation to bars and restaurants across St. Louis. We’ll be happy to add your establishment to our listings.
If that sounds like what you need, don’t hesitate! Contact us today to learn more about selling your bar business.Read More
Many business owners are emotionally attached to their businesses, and it is easy to understand why. Typically, business owners invest not only a considerable amount of time and money into their business, but a good bit of themselves as well. Owning and operating a business often becomes part of one’s identity. However, the fact is that no one will work forever, as retirement eventually comes for almost every business owner. With this in mind, it is important to prepare for selling your business well in advance.
Brokerage professionals can take your knowledge regarding your business, and use it to help you frame your business in the best possible light. Your expertise in your business can also help a broker find ways to improve your business so that it is more attractive to potential buyers. With all of this in mind, let’s turn our attention to the key steps you should take when preparing to sell your business and transition into retirement.
Select Your Second-in-Command
Any savvy buyer will want to know that the business is well supported by a capable team. Buyers rightfully worry about having a smooth transition period, and nothing helps dispel those fears like having a proven and capable second-in-command standing by. When selecting this important individual, it is important that you pick someone that understands how your business works and is a proven asset to its operation.
Automate, Automate and Automate
Buyers can be intimidated by taking control of a business. Having a proven second-in-command ready to assist is one smart step. Automating as much as possible is yet another prudent move. In short, you want your prospective new buyer to feel more confident about buying and operating your business.
Make a “Smooth Transition” List
As the seller, you have the critically important job of removing buyers’ fears. When you boost their confidence that they can successfully run your business, you increase the odds that your sale will go smoothly. Making a smooth transition list, which includes all the steps that you can take to improve the odds of a buyer being successful, is a smart investment of your time and effort.
A good transition list will include information about how to work with key customers, employees and vendors. You want to ensure that your customers, employees, and vendors understand that a sale will take place, but also understand that the process will be smooth and trouble-free. Whether large or small, take any steps that you can to show buyers that the transition will be well-received.
The average business owner has, in fact, never sold a business before, and is unprepared for this very complex process. Since the process of buying or selling a business is a very complicated one, they should strongly consider working with an experienced Business Broker or M&A Advisor who can help guide them through the process. Brokerage professionals are experts at buying and selling businesses. They understand what both buyers and sellers want and need. As a result, they can help you take the necessary steps to get your business ready to be sold.
The post How to Sell and Successfully Launch Your Retirement appeared first on Deal Studio – Automate, accelerate and elevate your deal making.
There is a considerable difference between determining the value of a privately-held company and a publicly-held company. Topping the list of considerable differences is the fact that privately-held companies do not have audited financial statements. Let’s look at how the owners of privately held companies should proceed in establishing a reasonable price for their company.
An audited financial statement is a costly endeavor. In order to avoid the cost, many companies simply don’t go public. Of course, it should be noted that publicly held companies, as the name indicates, reveal much more about their finances than their privately held counterparts do. Privately held companies are often seen as being more mysterious whereas publicly held companies are considered more “open.”
Business owners looking to sell their business will, of course, want to address the fact that their company lacks the public information associated with publicly held companies. Providing prospective buyers with as much verified information about your business as possible is one of the fastest and easiest ways to overcome buyers’ concerns. A smart move for any business owner is to work closely with their accountant to go over the numbers and create an easy-to-understand presentation for prospective buyers. This should serve to allay many of their concerns.
Working with your accountant is only the first step in providing prospective buyers with the information they need to feel comfortable. The second step is to work with an outside appraiser or other expert who can determine the value of your business. After that, you’ll want to decide on what your market price will be, as well as your “wish price,” or the price that you would ideally want. Third, you must know your “rock bottom” lowest price. You, as the owner, need to have this information as it will greatly facilitate and streamline all negotiations.
When buyers are reviewing materials and working to determine what price they are willing to pay, they will look at a wide range of factors including:
- Product diversity
- The size of your customer base
- Potential competitors in the area
- Competitors on the horizon
- Potential disruptions to your business, such as supplier problems
- The stability of your earnings
- The stability of the market
- Need for capital
Different buyers may place differing levels of emphasis on certain areas, but you can be certain that the aforementioned areas will be examined with care. The process is undoubtedly rather complex. This complexity underscores the need for professional assistance.
Ultimately, the market will determine the sale price of your business. For business owners, the first and most important step is to work closely with professionals such as accountants, appraisers, Business Brokers and M&A Advisors to establish the price of your privately held business. You can count on brokerage professionals to properly organize the facts and numbers that support that price.
BizBuySell’s Insight Report is filled with key statistics and information on a range of topics, including the labor shortage and hiring problems that many businesses currently face. Visit BizBuySell for more information about the findings that they recently reported for the third quarter of 2021. This website also offers an archive of past quarterly reports dating back to 2013.
The pandemic has “reshuffled the deck,” causing many to reassess their positions in corporate America. At this point in 2021, businesses are recovering, but the pandemic continues to play a role in business operations. 71% of business owners surveyed noted that they are facing higher costs than before the pandemic. Most respondents indicated that labor shortages have been having a significant impact on their businesses. There are issues both in hiring and retaining employees.
As the report explains, “According to the U.S. Census Bureau, retail spending in September increased 13.9% over the previous year. However, many businesses still struggle to attract or retain employees. In fact, 49% of owners say the labor shortage is impacting their business, while Business Brokers see it as the number one concern facing small businesses.”
Some of the problems related to the issue of labor shortage are not immediately obvious. As it has become common knowledge that employers are having trouble filling positions and are having to increase pay in order to attract new employees, existing employees are taking note. Since existing employees realize that new hires are being hired at higher wages, they are themselves often expecting raises. In turn, operational costs are going up for many businesses.
The fact is that the business owners are still selling and for a variety of reasons. BizBuySell’s statistics also indicate that of buyers who are planning to sell, 20% cite retirement as their main reason for selling, whereas 38% cite burnout as the primary reason.
According to the data collected by BizBuySell, transactions are up 17% over the last quarter, but are still 7% below pre-pandemic levels. However, it is expected that the number of transactions will grow to be well above their pre-pandemic levels in 2022.
Buyers and sellers alike should remember that the pandemic has changed business and will continue to do so in the near future. In short, the business landscape continues to evolve.
The post Current Insights Regarding the Labor Shortage appeared first on Deal Studio – Automate, accelerate and elevate your deal making.
Imagine working on your dream business for years, but retirement is finally upon you. Or maybe you’re ready to move on to your next venture.
No matter your reason, you should know how long it might take to sell a business in St. Louis. Then, you can sell it at the right time for you.
Keep reading to learn what goes into the timeline for selling a company.
Type of Business
One of the biggest factors that can affect the time it will take to sell a business is the type of business you have. Overall, you can expect to spend about 30 to 90 days from when your first list the business for sale before the sale closes.
But some businesses may sell faster or not nearly as fast. You should consider the demand for a business like yours. Take a look at other businesses for sale in St. Louis.
Then, you can figure out how long the listings have been up and compare that to the industry and type of each business. Knowing that can help set yourself apart, such as in the pricing or marketing of your St. Louis business.
Another thing that can affect the timeline for selling a business is the business structure. Some buyers may be okay with taking over a sole proprietorship or partnership where they have to work in the business.
However, other buyers may prefer an LLC or corporation that has a team to conduct the daily tasks. Think about how much time you spend in the business right now.
You may still be able to get a quick sale of a business that involves the owner. But you should prepare to find the right buyer to make sure that they’ll want to run the business successfully.
When You List
As you think about your industry and business structure, you can determine the best time to list your business. For example, a landscaping company may not sell fast if you list it in the winter.
On the other hand, a business with college students as its main customer base may sell well then. But you’d struggle to sell that type of business in June when college students are out of town for the summer.
Consider when you might want to buy the type of business you’re looking to sell. Then, you can make sure to list it early enough to beat your competitors but late enough that you can still get some interest.
Marketing the Sale
You should also figure out how to market your business for sale. Of course, you can market the business on your personal and professional social media accounts.
But you may want to work with business brokers to help get your business in front of potential buyers. The more places you can promote your listing and the more times you can share it, the easier it will be to find the right buyer.
Even if you need to sell a business in the off-season, you may still get some interest if you promote it enough. You might even get the amount of money you want as well.
The timeline for selling a company can also depend on the buyer you select. They may need to get a loan or other funding before you can close on the sale, so you might need to wait a while.
Of course, you can ask a buyer about their funding source for the purchase. Then, you will be able to decide if you want to wait for them to get a loan before you can sell the business.
If you don’t want to wait for a loan, you can find another buyer. But at some point, waiting for a loan may take less time than searching for a buyer who can afford to pay for the business in cash.
You’ll also have control over the timeline of the sale based on how well you prepare your documents. When you sell a business, you will need to give your broker and buyer information on the business’s finances.
Documents should also cover any lease for the store or office space and a list of utilities. You should also prepare a document that covers the operating procedures and prepare to hand over the social media accounts.
The more you can prepare these documents, the less time you’ll have to spend on them when a buyer expresses interest. Then, you may be able to move on with that sale.
You may also want to get a business valuation before you even list your business. Then, you’ll be able to list your business for a reasonable selling price to help attract more buyers.
If you list your business for too much, you may put off people who would otherwise want to purchase it. On the other hand, if the list price is too low, people may wonder what is wrong with your business.
When you sell a business, you may need to negotiate on the selling price. But having a ballpark price to list can make a huge difference in how quickly you get an offer.
You should also consider where in St. Louis your business is. For example, if you have a coffee shop or bar, it might sell faster if it’s near Washington University or UMSL.
On the other hand, a business with an office space may sell better if it’s downtown. Think about where you might want to operate the type of business you’re selling.
Then, you can think like a buyer, and you can understand why your business may not sell quickly. If that’s the case, you can work on marketing the sale to get offers.
How Will You Sell a Business?
If you want to sell a business, you may wonder how long it will take. Sadly, you can’t always predict how long it will take to close on the sale.
But you can think about a few factors to help narrow the timeline. Then, you can be sure to list and promote your business so that it can get an offer in no time.
Do you want to sell your business now? Register as a seller and list your business today.Read More