The first debate is over and the election countdown begins. Who are you pulling for? Never mind – the restaurant brokers don’t care. No matter which side makes it into the oval office, as a restaurant seller, you need to start looking ahead and prepare for the coming year.
Some brokers say that business is slow in anticipate of the election while buyers sit at the sidelines in a “wait and see” phase. That is not the case at We Sell Restaurants where we have more deals in contract than at any time in our fifteen year plus history. However, if you as a seller have been holding on until after a new President is sworn into office, here are some tips on what you can do between now and the election to be ready to sell early in 2017.
First, it is a lot easier to figure out where you are going next when you know where you are coming from. Make sure the data from your current year is up to date through last month. Know your key performance indicators like year to date sales, food costs and labor cost along with the performance of your marketing and advertising campaigns. Don’t overlook items like LTO (limited time offer) success and employee turnover. Buyers are more serious and curious than ever and you should expect them to ask questions about your total operation.
Once you have the current year’s starting point, analyze your findings against last year’s performance. Most importantly, also compare your results to the current year industry performance in your segment. Key questions to ask yourself:
- Am I performing above, at or below the industry? ( a very important key indicator)
- If I’m a franchise, where do I rank in the system?
- How am I doing compared to my previous year? Once you answer several questions you should start getting a clear picture of where you stand instead of a "gut feeling statement." Some might say business is bad if you’re down 10% from last year, but if your industry and segment was down 25%, you actually did quite well right?
Once you get this picture; you can now start looking ahead and drafting your plan for next year. What are your goals? Get with your management team and discuss the following:
- Do we open a second location or a new concept?
- Do we focus on strengthening operations and growing sales?
- Do we stay put and renegotiate the lease while saving money for future remodel or do we make changes now?
- Do we start looking at moving to a new location?
- Do we look at expanding or different brands if you are in the franchise industry?
- Is it time to exit the business for any reason?
- Are there any other scenarios that you may imagine may be reviewed through this process?
This process makes it very easy for you to see if you can achieve the things on your wish list through your financial results.
The common element in all these is to have current high quality information at your fingertips at all times. Many of the scenarios above will require you to have this information to provide to various other entities such as banks, landlords, franchisors and restaurant brokers.
If you have not invested in having financial information available to you on a monthly basis you are making decisions blindly. That’s whether you have one small family owned restaurant or multiple units. Sometimes you can be more lucky than good, but as we all know, at some point luck will run out.
It is not too late to make this happen for 2016 and be ready for great success for 2017 regardless of the political outcome. If you need help, contact the estaurant brokers to point you in the right direction.