Own a Restaurant? 6 Signs You Should Sell Your Business
An estimated 80% of restaurants fail within the first five years of business. Even fantastic restaurants struggle to keep their doors open, and their owners have to sell.
On occassion, restaurant owners who are turning a profit can feel the need to sell due to the stress of the job. Is it time for you to sell your business?
We’re here to talk about the signs that you’re ready to make a change and sell your restaurant. Read on to learn more.
1. You’re Feeling Stagnant
There will always be periods of stagnancy (whether real or percieved) when you’re running a business of any kind, and restaurants are no exception. Stagnancy doesn’t always mean that it’s time to consider selling, but prolonged stagnancy might.
This stalemate doesn’t only refer to business growth (or lack thereof), it can also be personal. You may feel like you’re no longer growing as a business owner or that your restaurant, even if it’s successful, isn’t putting you on a path toward the success you’re after.
It’s possible that you can fix this stagnancy, but if you’ve already tried to no avail, listing your restaurant for sale might be the best answer.
2. You Want to Pursue Other Ventures
This ties in with stagnancy, but it can also just be boredom or even ambition. If you’re feeling motivated to make a serious change, it could be time to sell a restaurant.
So how do you know if this applies to you?
You might be feeling an urge to try something new, even if it’s still within the field of hospitality or food service. You’re ready to try out different types of restaurants, start your own catering company, or even start working for yourself by becoming a private chef.
You may be interested in trying a new career path altogether. Maybe you’ve had dreams of becoming a tattoo artist, going to law school, or owning a different type of business.
It’s difficult to balance business ownership (especially restaurant ownership) with other large goals. There’s nothing wrong with selling a company when you know that your heart is yearning for something new and different.
3. You’re Losing Money
This is a huge sign that you’re ready to sell your business. As we mentioned before, restaurants are difficult to run, and many of them fail within their first few years. There’s no shame in realizing that your business isn’t, and may never be, as profitable as you’d like it to be.
Restaurants have tight margins, and between paying your team, making the place look nice, paying for ingredients, and paying your rent, it’s more than possible that you won’t turn a profit unless you’re very lucky and serve great food. Luck is a huge factor.
Selling your business while you’re ahead, or at least not too far behind, maybe the best thing for you.
Take a look at your monthly expenses and profits. Before you sell, you can see if you can make any changes to improve your revenue, especially if you’re motivated to keep your restaurant.
Sometimes, however, it’s best to cut your losses and start over with another venture.
4. You Want a Better Work/Life Balance
Having a good work/life balance is crucial for your mental health, but unfortunately, many business owners aren’t able to do that. They start to experience work burnout which can eventually lead to depression and anxiety.
So what are the signs of work burnout?
People who are experiencing burnout tend to struggle with motivation. Even if they love their work, they no longer have the will to show up at the restaurant every day because they’re so worn down.
They may struggle with frequent fatigue. Work burnout can cause insomnia and oversleeping alike.
People who are burnt out are often more irritable and moody. They may start to lash out because they’re struggling to control their emotions.
Even without burnout, people who own restaurants work long hours and may not get to spend as much time as they’d like with their friends and family members. If you have a family with young children, this is an even bigger problem.
It’s okay to step back from being a business owner because you’re tired of it.
5. The Risk No Longer Seems Worthwhile
Unless your restaurant is the best of the best, you’re running a risky business. There is always the potential for failure, and this is sure to be anxiety-inducing.
For many people, the risk is worth it. They’re excited by the challenge.
For others, they’d rather take a step back and fall into a more passive role. They’re ready for a steady income and a lower-stress environment. Which category do you fit into?
6. You’re Reading This Article
If you’ve been looking up reasons to sell your business, it’s likely that it’s already been on your mind for a while. While no one should jump right into selling their restaurant, if you’ve been thinking about it consistently, that seems like a good enough reason.
Reading this is a sign that you’re ready to move on to something new.
Is It Time to Sell Your Business?
Making the decision to sell your business is tough. You’ve poured your heart and soul into your restaurant, but it’s good to know when it’s time to let go.
If you’ve made the decision to sell your business in St. Louis, or even if you’re still thinking about it, we want to talk to you! At Fusion, we can go over your options and walk you through the process. Book a consultation with us today.
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7 Common Mistakes to Avoid When Selling a Small Business
Each year in the United States, entrepreneurs start over 600,000 new businesses. Unfortunately, not all of these companies reach the heights their founders intended.
Investing in effective business management tactics is an important component of running a successful business that all entrepreneurs should prioritize.
Not everyone knows how to sell a small business. We’ve developed a quick guide full of business selling tips that explains all of the essential things to consider. Let’s get started with what you need to know about selling a small business.
1. Inaccurately Representing Your Business
This is one of the most common mistakes small business owners make when putting their company up for sale. Undervaluing (or overvaluing) your business can immediately turn off potential buyers, so it’s important to be realistic about what your business is worth.
You may also develop a reputation for being dishonest, which will make it even harder to sell your business down the road.
2. Not Having a Solid Exit Strategy
When you’re ready to sell your small business, you need to have a clear idea of what you want to do next. Do you want to retire? Start a new business? Travel the world?
Whatever your plans are, you need to communicate them to potential buyers so they know what to expect. Having a solid exit strategy will also help you negotiate a better sale price for your business.
3. Not Preparing Your Financials
One of the first things potential buyers will want to see is your financial information. If you’re not prepared, it will be difficult to get a good price for your business.
Make sure you have your books in order and can provide potential buyers with accurate information about your revenue, expenses, and profit margins.
4. Failing to Negotiate
Many small business owners are afraid to negotiate when selling their business, but it’s important to remember that you are in control of the sale. Don’t be afraid to ask for what you want — you may be surprised at how much you can get!
5. Not Understanding the Tax Implications
Selling a small business can have major tax implications, so it’s important to understand the laws before you finalize any deal. Speak with a tax advisor to make sure you are taking advantage of all the tax breaks available to you and that you are not paying more taxes than you need to. It’s also important to remember that failing to pay your taxes can come with legal penalties.
So, even if you’re not planning on selling your business anytime soon, it’s still a good idea to stay up-to-date on the tax laws.
6. Not Having a Lawyer
When you’re ready to sell your small business, you need to have a lawyer on your side.
A lawyer can help you navigate the legal aspects of the sale, including drafting a sales agreement and ensuring that all the necessary paperwork is in order. Having a lawyer can also help you protect your interests if there are any disagreements during the sale process.
7. Not Working With the Right Buyer
Just because someone offers to buy your small business doesn’t mean they are the right buyer. It’s important to take your time and find a buyer who is a good fit for your company. They should have the resources to properly run your business and be able to meet your expectations for the sale.
Otherwise, you may end up regretting the sale down the road.
How Do I Find the Best Buyer For My Business?
Consider working with a professional. A broker can help you find the right buyer for your business and negotiate a sale price that is fair for both parties. They will also be able to handle all the paperwork and legal aspects of the sale so you can focus on running your business.
You can also talk to your lawyer or accountant. They may know of potential buyers who would be interested in your business. You can also post an ad online or in your local newspaper.
Just make sure you include all the important details about your business, such as its size, location, and type of business. You should also include your asking price. It’s also a good idea to work with a business broker.
What Red Flags Should I Watch Out For?
As you might guess, one of the biggest red flags you need to keep an eye out for is buyers who are trying to lowball you. If someone offers you an unreasonably low price for your business, walk away. It’s also a good idea to be wary of buyers who want to pay in installments or with a promissory note. These types of deals can be very risky and often end up costing the seller more money in the long run.
Another red flag to watch out for is buyers who are reluctant to put anything in writing. If a buyer is unwilling to sign a sales agreement or other paperwork, it’s a good sign that they are not serious about buying your business. Don’t waste your time with these types of buyers — move on to someone who is more serious about the purchase.
Finally, be wary of buyers who want to rush into a deal. A legitimate buyer will understand that you need time to think about their offer and consult with your advisors. If a buyer is pressuring you to make a decision right away, it’s a good sign that they are not looking out for your best interests.
Selling a Small Business Doesn’t Have to Be Complicated
Selling a small business may seem difficult, but it’s much easier than you might expect. Make sure that you consider the above information so you can avoid obstacles you may have encountered.
Want to learn more about what we have to offer? Feel free to get in touch with us today and see how we can help.
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Preparing for Your Eventual Retirement
Many business owners are truly committed to their businesses. As a result, it is very difficult for them to step away even when they approach retirement age. It is not uncommon for business owners to keep working into their golden years. But the truth of the matter is that at some point almost everyone will need to embrace retirement whether it is for health issues, moving to a new location, or simply for greater peace of mind.
If you see this path approaching for you in the near future, it could feel overwhelming. After all, most people have not sold a business before. As a result, they feel unclear about the process and don’t know where to start. However, everyone should be thinking about the eventual sale of their business because this future event should determine many of your current activities and decisions.
Let’s take a look at some things you can do well in advance to ensure that an eventual sale of your business goes as smoothly as possible.
Automate Processes
When prospective buyers look at your business, they will want to be able to easily envision it operating smoothly without you involved. Because a good portion of business owners are so integral to the functioning of their businesses, it can be difficult for them to figure out how to decouple themselves from operations. In some cases, this process can take years.
Now is a good time to consider this issue and what you can do to make sure your business can function without you one day. Give some thought to who at your organization could be a second in command. When a buyer sees that a competent and knowledgeable employee will be staying on to assist them, it can go a long way in allaying any concerns.
Put Yourself in the Buyer’s Shoes
Imagine you were buying your business. What kinds of issues might be of concern to you? Chances are these will be the same issues that could concern potential buyers. Once you have identified any spots of weakness, you can start to zero in on figuring out how to handle them.
First and foremost, you will want your buyer to feel confident that there will be a smooth transition and that they can almost immediately begin to profit from their purchase of your business. Anything that you can do to help ensure that is true will benefit the sales process.
Business brokers and M&A advisors are experts in the world of buying and selling businesses. They will help you to properly evaluate your business and look for these areas of weakness. Through this means when you do decide it is time to retire, the process will go more quickly and seamlessly.
Copyright: Business Brokerage Press, Inc.
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Ask a Broker How to Attract High End Buyers and Improve Curb Appeal
Putting your business on the map is not as simple as posting a sign, sticking up some flyers, or throwing a grand opening party. Instead, it’s about making your business stand out from the rest by creating an appealing and memorable first (and lasting) impression for passersby and potential customers.
Good curb appeal is essential if you want to see more people in your store and have them returning again. After all, people tend to make their buying decisions in the first few seconds.
If your storefront looks dated or unkempt, people won’t want to go inside. Fortunately, that means giving your business a little boost regarding looks might be as easy as a splash of paint.
With just a little work and preparation, you can give any space an updated new look in no time at all – here are some tips that will help improve curb appeal!
Fix Walkways and Sidewalks
If your walkways and sidewalks are cracked and broken, you should strive to get them patched up as quickly as possible. While this creates an eyesore, the larger issue is that it can create a hazardous environment for customers.
Of course, you may think that this is something you can put off until later on, but the truth is that fixing walkways and sidewalks is one of the best investments you can make – particularly when it comes to your business’s curb appeal.
Walkways and sidewalks in disrepair don’t just look bad; they also send the message that your business isn’t well-maintained. If a potential customer walks over a broken path or a cracked sidewalk and sees that your business doesn’t seem to care enough to replace it, they may wonder what other issues they might run into while visiting.
To ensure your walkways and sidewalks are tip-top, you can hire a contractor or do the work yourself. After all, it’s an easy fix that will only take a few hours to complete.
Keep the Exterior Clean
If there’s one thing all business owners should know, it’s that a tidy business exterior is extremely important. After all, a dirty facade gives off a shabby and unkempt vibe – which is the last thing any business owner wants.
Instead, a clean facade shows that your business has pride in its appearance and is well-maintained and cared for. After all, if a business is clean and organized inside, then it’s likely that they’re paying the same attention to the product or service they offer.
Given that it doesn’t cost much to keep your exterior clean, this is something that every business should be doing, no matter the circumstances. Of course, keeping your exterior clean is easier said than done. You must constantly be vigilant, sweeping away dirt and debris as soon as they appear.
Not only do customers assess your quality by your presentation, business cleanliness is at the top of the list for high-end buyers.
Improve Your Landscaping
Landscaping is a great way to improve your curb appeal, especially if your business is located in an outdoor shopping district. After all, well-maintained, vibrant plants and shrubs can be an excellent addition to any street, helping to bring attention to your place of business.
However, when it comes to improving your landscaping, don’t try to make changes all at once. Always aim to be mindful of cost in relation to return. Instead, start small by adding a few well-placed plants, shrubs, or flowers.
You can also replace dead or dying flowers if they are on your property. Of course, you don’t have to have a large garden to improve your landscaping; a few small pots or plants can go a long way.
Interchange Season Decor
Changing how your business looks throughout the year can be a fantastic way to boost its curb appeal – mainly if you’re located in a shopping district with a high volume of foot traffic. You can start by swapping out your regular signage for seasonal signs.
This is a great way to bring attention to special deals or sales you’re hosting during specific seasons. You can also change up the decorations inside your store to bring a bit of the season to your business.
Changing up your storefront is a great way to draw attention to your business, especially if you’re trying to get noticed when there’s a lot of competition in the area. It can also help you to attract high-end buyers.
Add A Little Plant Magic
There’s no doubt that having plants in and around your store is a great way to boost its curb appeal and increase your return on investment. However, you don’t have to stop with a few potted plants on the sidewalk.
You can add more plants to your store by adding them inside. Of course, this might seem like a strange choice. Still, there are many benefits to bringing plants indoors:
It cleans your air, making your store healthier for customers, employees and plants are a natural distraction for nerves and anxiety, and they can make your store feel warmer and inviting.
With all of these benefits, it’s clear that adding plants indoors is a great way to improve your curb appeal. Plants can also be inexpensive, so there’s no excuse not to add them to your store.
How to Improve Curb Appeal & Why It’s Important for Your Business
Boosting your business’s curb appeal is about investing in your space and caring about how your business is presented to the world. If you ignore issues like dirty exteriors and unkempt landscaping, your business sends the message that you don’t care enough to improve it.
However, when you improve curb appeal, you’re showing customers that you have pride in what you do and that you care about their experience. If you follow these quick and easy tips, you can see an improvement in your business’s curb appeal.
All these things matter if you want to sell or buy a business. Speaking of business real estate contact Fusion Advantage for help.
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A Look at the Market Pulse Report
The Market Pulse Report Survey is a resource that has a variety of information that business brokers and M&A advisors regularly utilize to better understand the business landscape. The most recent survey was conducted April 1st to April 15th 2022 and had 360 broker and advisor respondents. It also marked the 40th edition of the quarterly report. The Executive Summary of the report can be accessed here https://www.ibba.org/resource-center/industry-research/
The Main Street Market
One notable fact included in the latest report is that in the Main Street market, between 70% to 80% of buyers are likely to come from within a 20-mile radius. However, with larger companies, it is common for buyers to originate from a distance of over 100 miles away or greater.
The survey also indicated there are two key “headwinds” that businesses are currently facing. These include labor shortages and supply chain issues. Not surprisingly, labor issues are currently creating problems for organic growth. Likewise, supply chain issues can cause prospective buyers to shy away from a business.
The Profile of Current Buyers
The survey also indicated that Main Street buyers not only include the “typical” first-time business buyer. These individuals are often looking for a job in the form of owning a business. Serial entrepreneurs who have made money off previous deals are also now seeking to jump back in and buy another business. The survey indicates that about one-third of buyers who purchased businesses in the $500K to $1M range are serial entrepreneurs.
Additionally, there is a great deal of money flooding into the industry. The money is mostly coming from private equity, family offices, and corporations. Feeling burned by the lack of bank credit by the 2008-2009 economic downturn, these buyers don’t want to get caught in a similar situation again.
A Seller’s Market
The survey indicates that it is currently a seller’s market and that record setting multiples have been occurring. In Q1, an impressive 97% of businesses were receiving their asking price. However, nothing lasts forever. If you’re considering selling your business, it’s a good idea to start making progress now before this trend stops benefitting sellers.
Even with the strong sales track record last quarter, it’s important to note that a fast sale is still improbable. Even in the best economic conditions, it typically takes many months to sell a business.
There are many factors currently benefiting sellers, such as low interest rates, SBA involvement, and people not wanting to work for corporations. However, it’s important not to wait for the “right moment” as often that moment never comes.
It’s always a good idea to begin taking steps to prepare for the sale of your business as soon as possible. This can make a tremendous difference toward fostering a positive final outcome.
Copyright: Business Brokerage Press, Inc.
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