A Step by Step Guide to Selling a Bar in St. Louis
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.