6 Things to Consider When Selling Your Restaurant Business in St. Louis
The restaurant business is a lucrative one with annual sales comprising more than 4 percent of America’s gross domestic product. That’s a whopping $863 billion in sales. So, there’s no doubt about it, the hospitality industry is cut-throat.
With so much competition around you, owning a restaurant is not for the faint of heart. This is probably one of the most common reasons most restaurant owners choose to sell when the time is right.
If you’re one such business owner, check out these selling tips before you put your restaurant on the market.
1. Know What Your Business Is Worth
As a business owner, there’s nothing worse than undervaluing or underpricing what you’ve spent many years building. Before you list your restaurant for sale, ensure you have a clear idea of what it’s really worth.
To add to this, potential buyers or investors will want a detailed breakdown of your financials because they need to know what they’re buying into, too.
Set aside enough time to gather all the necessary financial data you need so that your sales pitch is attractive to potential buyers/investors. They’ll want to see a steady influx of cash flow as well as high-quality sales. During this time you can also augment and streamline your sales and expenses to improve your cash flow.
It’s also a good idea to scope out what other restaurants are selling for in your area. Hire the expertise of an appraiser if you want to make extra sure that you sell your business for the right price.
2. Understand the Terms of Your Lease
Selling a business is not always as easy as finding the right buyer. You often have other responsibilities that need consideration, such as the terms of the space you are leasing.
If you do not own the restaurant building/space, you’re most likely leasing it from someone. Before you sell your business, you must ensure you aren’t breaching any lease terms.
Remember that your landlord could jeopardize the terms of a good sale if you are in breach of a lease agreement. If you’re unsure of all the legal particulars when it comes time to sell your company, it’s best to hire a lawyer who can explain your legal rights to you.
It’s in your best interest to speak to your landlord about your plans to sell the restaurant. They might be willing to let you out of your lease early, so it’s worth being open and honest.
3. Enlist the Expertise of a Business Broker
While you think you might have a good handle on the restaurant industry, no one understands trends like a restaurant business broker. These professionals specialize in selling and buying restaurants of all types and sizes, in different markets too.
A business broker can help you create the perfect marketing scheme in order to find the perfect buyer. They are specialists in their field and have a full grasp of the restaurant business, current trends, what buyers look for, and how to settle on the best deal.
If you have no idea where to start when trying to sell your restaurant, a business broker has you covered.
4. Sell Your Restaurant as a Commodity
How well is your restaurant doing? If it’s a thriving business with great staff, good customer turnover, intact furniture and fixtures, and up-to-date equipment, it’s a real commodity. And you should consider selling it as such.
In short, this means selling your business as a whole, an entire asset, rather than in parts. In general, most buyers find a thriving business that’s well established far more enticing than buying it in parts.
5. Consider Selling Off Your Liquor License
As a restaurant owner, you’re probably fully aware of just how valuable a liquor license is. In fact, it’s one of your most lucrative assets, depending on the location of your restaurant.
If you don’t plan on selling your business as a whole, you can begin by selling your liquor license to a willing buyer. Most of the time, you could receive a decent profit as liquor licenses are difficult to acquire so a potential buyer might be willing to pay.
Again, you can opt for the help of a broker to find you the right buyer.
6. Improve Your Restaurant’s Physical Condition
Selling a restaurant is much like selling a home — its ”sellability” hinges on what it looks like and its physical condition, especially from the outside. Curb appeal is not only important for homes, but for all street-side restaurants and businesses.
Before you list your business for sale, put some effort into upping your curb appeal, first. This might include a fresh coat of paint for the exterior, new paving, awning covers, light fixtures, tables, and chairs.
Always keep rubbish and other forms of refuse out of sight from your customers. The staging of the interior of your restaurant is also important. This is probably one of your key selling points.
You might need to consider replacing outdated furniture, the interior might need a repaint or updated tablecloths. Going that extra mile to improve the physical space of your restaurant can do wonders for how quickly it sells, and the profit you pocket.
Looking To Sell Your Restaurant Business?
The decision to sell your restaurant business is huge — that’s why you need the right guidance. With Fusion Business Services you have the expertise, support, and industry connections of one of the best business brokers in the St. Louis region.
We can put you in touch with legitimate business buyers willing to offer you the price and profit that you deserve after many years of hard work. Learn more about how we can help!