You’ve worked for years or decades to build your pizza parlor into what it is now. However, you’re ready to move on, either to build a new business or retire.
Either way, you need to know how you should sell your pizza shop. Then, you’ll be able to make the transition easy for you, the buyer, and any employees who will keep working there.
Keep reading to learn more.
One of the best ways to sell your pizza parlor when you want to sell is to start preparing for the sale early. As soon as you know you want to sell, such as to retire, start planning your exit strategy.
You can decide if you want to mentor whoever buys your pizza business. This can be important if you want to make sure the recipe and menu items stay the same.
Another thing to consider is if you want the buyer to pay for the entire business upfront or if you’re okay with a financing agreement. Both can work, but each option can affect how much involvement you may need to have after you sell.
Starting your exit strategy early can also help you prepare current employees for the change. You can decide if you want the buyer to maintain your staff or if you may need to help people find new jobs.
Determine the Value
Of course, before you sell a business, you need to figure out how much it’s worth. You can determine the value of your business in a few ways, so consider which works for you.
One easy method is to use the book value, which uses the value of stakeholders’ equity. Another option is market capitalization, and that multiplies the price of shares by the number of outstanding shares.
You can also use methods like times revenue, discounted cash flow, or earnings multiplier. Consider meeting with an accountant or another professional to compare the valuations you get with different methods.
Then, you can decide how you want to set the price of your business. And you can compare different methods to find a fair selling price.
Consider Making Improvements
If your business valuation is lower than your ideal selling price, you may want to make improvements and updates. You might choose to buy some new equipment so that you can make more pizzas in the same time.
Or perhaps you decide to repaint the restaurant so that it looks better to customers and potential buyers. You don’t have to do anything to your business before you sell it, but improvements may help you get more interest.
Some buyers may not want to purchase a business that will require work before they can make a profit. If you can update old equipment or replace chairs and tables, you may convince more people to make offers.
This can be an excellent option if you don’t want your business to sit on the market for long.
Organize Your Documents
As you get close to selling your pizza parlor, you should organize essential business documents. Make sure you have recent tax returns, profit and loss statements, lease documents, and a list of your equipment.
You may have already gone through these when determining the valuation. However, it helps to go over everything and make copies of the documents that you can present to a broker or potential buyers.
Put a copy of all of these documents into a folder so that they’re easy to find and review. You can keep a copy for yourself, which can help you as you go through the process of selling your pizza parlor.
Find a Business Broker
You can sell your restaurant business without bringing in any help. However, working with a business broker offers a few benefits that you won’t get on your own.
For one, the broker can help you list your business in multiple places so that more buyers can find it. When you get offers, the broker may also help you weed out buyers who aren’t serious.
If you don’t want the public to know your business is for sale, a broker can also help. They can tell serious buyers about your business, so you can keep customers from learning about the sale.
A business broker may also help you negotiate for a better selling price. They usually charge a percentage of the final sale, so they can work to get the best price for both of you.
Advertise the Sale
If you don’t care who knows you’re looking to sell your pizza restaurant, you can advertise the sale. You can put up a sign in the window, or you can tell your employees or loyal customers.
Consider posting about it on your social media or sending an email to your subscribers. This can be a great way to attract buyers who have some sort of connection to the business.
For example, a manager may learn of the sale, and they may make an offer if they care about the restaurant. You may also have a customer who wants to buy the pizza place.
It may give you peace of mind to sell to someone who you know will take good care of the restaurant.
Pre-Qualify Potential Buyers
Whether you sell to someone who you know or not, you should pre-qualify buyers. You can ask buyers to provide proof of having the cash or that they can get a loan.
Pre-qualifying buyers allows you to verify that they intend to go through with the purchase. You won’t have to waste time meeting people who just want to know how much the business costs.
A business broker can help you go through potential buyers, so you don’t have to do the work yourself. Then, you can make sure you sell the pizza parlor to the best person possible.
How Will You Sell Your Pizza Parlor?
Selling a pizza parlor can be a tough decision, especially if you’ve owned it for years. Fortunately, you don’t have to drag out the process or worry about selling it to someone who will ruin the business.
Be sure you start planning for the sale early. That way, you can gather your documents, set a reasonable price, and you can compare different offers to choose the best one.
Are you ready to sell a pizza parlor? Register as a seller and get started today.Read More
Almost every sale of a business involves a high degree of negotiation between buyers and sellers. In this article, we share some of the questions you can ask yourself to prepare for this part of the process. After all, optimal outcomes are typically only achieved through proper negotiation strategies. Keep in mind that one of the key strengths possessed by Business Brokers and M&A Advisors is expertise and skills in negotiating deals.
Can Both Parties Split the Difference?
If the buyer and seller can’t agree on a number, one negotiating tactic is to have them split the difference. This is a tactic that is simple to understand, and it shows both parties that the other is willing to be flexible. This reveals a good degree of goodwill and can serve to not only keep both parties talking, but also lower any pre-existing tensions. When both parties are still at the table, there is still hope that a deal can be reached. This tactic serves to continue the discussions and can often be highly beneficial.
Can the Buyer and Seller Better Understand One Another?
When it comes to good negotiations, one of the goals is for both parties to seek to understand one another. Sometimes a buyer or seller’s needs don’t even involve the numbers on paper. Instead, they may be seeking to adjust terms to make them more conducive to their overall goals. If you can keep an open mind and seek to better understand what the other party is ultimately looking for, it can go a long way in making the deal happen.
Can You Bring in a Professional?
There is an old saying that says “Never negotiate your own deal.” One of the benefits of bringing in a brokerage professional is that this third party won’t have the same level of emotional investment. This means that he or she can keep a neutral perspective and be more apt to see things from both sides. Sometimes a new perspective can work wonders. Further, a brokerage professional will understand the myriad of complex factors that must be successfully resolved before the deal is finalized. A Business Broker or M&A Advisor will have tips and techniques that can only be gained from years of first hand exposure to making deals happen.
The post Questions to Ask When Negotiating a Deal appeared first on Deal Studio – Automate, accelerate and elevate your deal making.
Are you considering selling your business? Trying to sell a small business is difficult. Most sellers find it a difficult process, from the ﬁrst valuation and confidential marketing to buyer questions, myriad extensive research requests, and a bombardment of legal documents.
Although business owners understand how to run their businesses, they are typically inexperienced in the business sale process and haven’t spent time preparing.
Besides, good business brokers understand how to manage this process and can be valuable to owners.
There are many reasons why working with a business broker near me is a good idea. Here we look at seven ways the best business broker can help to sell a company.
1. Access To A Larger Market Of Potential Buyers
Selling your business through the services of a broker is much like working with a real estate agent to sell your home. When you hire a broker, they market your business while still maintaining a level of confidentiality you won’t get by posting your business on public websites.
Some details need to be concealed from the public as they can negatively affect customers, employees, etc. Thus, a broker will help you hide specific details such as business name, location, product, and services.
Furthermore, brokers have a wealth of market knowledge for your business type. They also have vast resources that include a personal network that can help you reach more potential buyers.
2. Determines The Value Of Your Business
Weighing the value of your business can be harder than pricing a house.
Every business is different and has many variables that may impact its value. But brokers have access to hundred databases that they can use as a reference point. A broker will value your business based on other similar businesses they have sold.
Also, a broker can value your business based on the income’ cap rates’, which is commonly used by commercial and real estate businesses. A broker can also utilize investment return rates, carry-back capability, historical cash flow, and amount of debt to determine the value of your business.
But the only way a seller will feel assured of the best deal is to get several bidders for the business. This scenario is possible with the resources professional brokers have.
3. Emotional Detachment
A broker as a third party is likely better positioned to negotiate a better deal with buyers.
Furthermore, most business owners have an emotional connection to their business, and negotiating their own business can be a traumatic experience. A broker will bring an objective perspective and help you see your business from the buyer’s viewpoint.
This will help you be more realistic in understanding the financial and economic factors that buyers also consider. Furthermore, the business must continue running during the sale process until the transaction is finalized.
Thus, you will have enough time to run your business.
4. Problem-Solving Experience
A broker will help in the managing of the sales process.
It is worth noting that the process of selling businesses is more complex than selling real estate. You will note that there are more steps in selling a business than a real estate business. Additionally, more problems need to be solved in the process.
For instance, a broker must determine the valuation, negotiate a price, keep clients financial and accounting records in order and go through the escrow before closing the sale.
Furthermore, a broker will facilitate buyers and seller meetings and interviews. The broker will also manage the meetings and provide timely and sequential information while resolving any conflict.
Additionally, the who process may belong, and a broker can spend up to 24 months building a referrals network.
5. Prepares Presentation To Potential Buyers
Before the negotiation, the business sale agent will prepare all your information to create a presentation that includes research documents and reviews. These documents show a brief overview of the business, its past, and the projected future performance.
Also, a broker will determine the right protocol for negotiation, which will depend on the number of bids.
Business transfers are not just about signing an agreement. There are fixtures, equipment, and others like intellectual property; a good broker can negotiate the value of tangible and intangible items.
Negotiation skills are important for a successful selling or buying of a business.
6. Assist Buyers In Accessing Financing
It has become more challenging to find small business purchase financing in the past years.
However, a broker can help a prequalified buyer get a loan. With their extensive network, brokers can also give feedback to potential buyers who can’t afford to purchase with their savings about their viability to get a loan.
A broker is simply keen on safeguarding every aspect of the deal to ensure a closing occurs.
7. Higher Selling Price
A broker will appealingly present the business to get buyers to pay the price you desire.
If a seller does not hire a broker, they won’t know how to manage competitive bidding and increase offering prices. Contrarily, if you hire an agent to sell your business, you are most likely to get a higher price than in a situation where you negotiate the deal yourself.
Hire A Business Broker Today
You might be an expert in running your business but fail to have the experience and skills needed to close a deal successfully.
Are you looking for an ST Louis business broker?
At Fusion Business Services, we are the best brokerage service with a fully integrated process to help clients understand their business sale and purchase options. We are totally confident about our in-depth planning session to help you make the best decision regarding your sale or acquisition.
Contact us today to boost the sale of your business.Read More
When you’re trying to sell your business, the last thing you want is to waste time dealing with buyers who aren’t qualified and are unlikely to actually make a purchase. After all, you will not want to reveal details about your business to someone who may be looking to take advantage of the situation. Let’s take a closer look at how you can weed out legitimate buyers from those who are just kicking the can down the road.
Legitimate buyers will ask the right questions. They will have a keen interest in your industry and are seeking to gain more information. They will also be likely to ask intelligent probing questions about your customer base and the strengths and weaknesses of your business.
The best buyers will also ask logistical questions about your inventory and cash flow. It goes without saying they will want to know details about profits that are generated. Real buyers will also be concerned about wages and salaries. Their goal will be to ensure that your employees are taken care of and will be unlikely to quit.
Another area that you can expect serious buyers to ask about is capital expenditures. They will evaluate any equipment and machines involved in the business. They will also likely inquire about inventory that is unusable due to the fact that it is outdated or problematic. After all, if they are truly planning to buy the business, they would inherit any headaches.
A good rule of thumb is to imagine yourself in the shoes of the prospective buyer. What kinds of questions would you ask? If you find that a buyer is only asking the bare minimum of questions that only scratch the surface, odds are that they are not really interested. You can expect the legitimate buyer to ask about everything from environmental concerns to details about your competitors.
The best way to evaluate buyers is to turn to the experts. Your Business Broker or M&A Advisor will have years of experience in talking to buyers and will have a leg up on evaluating who is worth your time and energy.
Further, you would likely be overwhelmed with the process of handling buyer inquiries while you are still trying to effectively run and manage your business. A good brokerage professional will handle your incoming inquiries and only notify you of buyers who are suitable, qualified candidates. They will ensure that the highest standards of confidentiality are held along the way.
About 50% of business owners try to sell their businesses themselves, and most of them fail.
Deciding to sell your St. Louis business can be heartbreaking because you’ve spent years building it – it practically becomes your baby. However, you also need to ensure that you sell it at the right time to ensure maximum investment return.
With that in mind, here is a look at top indicators that it’s time to sell your business and how Fusion can help you.
1. New Opportunities
Most entrepreneurs land new opportunities, even when their ventures are doing well. The opportunities come in different forms, including a new business, a role in a larger organization, or something that offers more.
And while you might always say “no,” there may come a time when you are conflicted between moving on and staying in your business. This is particularly true if you are ready for a new challenge and feel that the opportunity could be your chance. When that time comes, it might be time to sell your business.
Otherwise, you will regret not taking the chance to try something new.
2. You Lack Motivation and Ideas
Despite your best efforts, there comes a time when we hit a creative dead end. Business owners in this situation find themselves without ideas on keeping their venture afloat.
As a result, the workflow and business sales suffer. Running a business is hard enough without worrying about how your burnout will affect your venture.
So what can you do?
Rather than force unlikely business results, it may be best to accept failure to grow. There is no harm in moving on, especially if running a business is no longer a motivating and fulfilling experience. Consider selling your St. Louis business if you start experiencing entrepreneur burnout.
3. The Business Can Run Without You
When investors shop for a business for sale, they buy companies in different states. However, the companies that attract the best prices are the ones that can continue running profitably.
A business that can run independently is more viable because buyers only need to invest financially. They don’t need to be active participants.
Does that describe your business? Can your business run itself? If so, you’re likely to get a bigger payout. This doesn’t mean you can’t sell if your business doesn’t run independently yet. It just means you should take time to develop it so it doesn’t rely on your day-to-day presence.
Once you have done all you can for the company, you can sell it to someone who can appreciate your hard work and earn a bigger payout at the same time.
4. You Have Fallen Behind on Industry Trends
The emergence of the digital era has transformed the world of business. Traditional ways of doing business are no longer reliable, especially if you hope to dominate the market and become an authority in your niche.
Entrepreneurs have to adapt and meet market demands. Unfortunately, not all business owners get in line with moving industry trends.
All too soon, they find themselves outmatched by competitors because their services:
- Can no longer compete with larger and more aggressive companies
- Have become obsolete
- The business model is not viable enough to stay afloat
If you have fallen behind industry trends and fear you have nothing more to offer, it might be best to sell the company. It can be a difficult pill to swallow, primarily if you have invested years into building the business.
However, the market will quickly swallow you up if you wait too long to sell and reduce the value of what you could get for the company.
5. The Business Has Outgrown Your Skills
As your company grows, there may come a time when you realize you are no longer an asset to the business. And while it’s hard to accept, honest entrepreneurs can often come to that realization by themselves.
For instance, business owners often make good salespeople. But when the company generates $5+ million in annual revenues, it demands more leadership than your skills can deliver.
Having the courage to admit that and take the appropriate steps to ensure the business’s success is crucial. And while you can learn and grow with the company, it’s also okay to sell it to someone who can take it further.
6. Your Professional Aspirations Have Changed
There is no shame in admitting that the venture you spent your life building doesn’t do it anymore. People develop new dreams or realize that they aren’t cut out for a particular type of business. When that happens, it’s best to sell your company and find a new passion.
But all isn’t lost. You can use the money from the sale of your St. Louis business to fund a new venture. Whether it is a new job, returning to school, or a new startup, fresh starts can be pretty exhilarating.
7. You Can No Longer Tolerate the Risk
Entrepreneurs often have to carry the risk of their company’s profits and losses. Sometimes, this can mean celebrating big wins while barely earning a salary at other times. During the early stage of the business, existing on a tight budget and not worrying too much about losses is normal and exciting.
But as you get closer to retirement, your financial needs change, and it becomes more critical to minimize risk. Whatever the case, selling your business might be the best to reduce the risk to your financial profile.
8. You are Ready for Retirement
Beyond financial reasons for selling a business, life events like the death of a partner, health deterioration, or divorce can force your hand. Other compelling reasons for retirement include stress and not wanting to manage the company daily.
Whatever the reasons for retirement, the sale of your St. Louis business might be the best cause of action. The income generated from the sale can help fund your future. Just be sure to make the company as attractive to buyers as possible to maximize the sale value.
Sell Your Business with Fusion
Do you think it’s time to sell your St. Louis business? At Fusion, we are dedicated to providing valuable selling tips and guidance on selling businesses. From pricing and valuation issues to exit strategies, we strive to ensure the sale of your business goes smoothly.
Register here if you want to sell your business with no stress.Read More