You have built up your restaurant business over the years and have made a good living and now you want to retire. Perhaps you made an investment in a business that paid off in the short-term and you are looking to cash out. No matter how you arrived here, you are looking to sell your restaurant. There are some things you will want to consider before you try to sell your business that will affect how well the transaction goes and how easily your restaurant sells.
Selling a restaurant may depend on your time frame. It's a good idea to define your motivation and sale urgency before you consider selling. Some motivations force quick action. Others allow for a more flexible timeline.Here are some questions you need to ask yourself:
- Do you want an immediate sale?
- Are you willing to wait for the deal and maybe finance a piece of the business?
- Will you stay on after the sale or are you taking the money and running?
If you want a quick sale and a high selling price but your restaurant isn’t in top shape for a sale, you’ll have to make some concessions. This means that if you have a specific dollar amount that you want to sell for then you may not be able to sell as quickly as you hope. On the other hand, if getting out quick is your highest priority then you may have to sell at a price lower than you expected.
Depending on your motivation and time frame, you may be marketed as either an "asset sale" or a going concern.
A going concern reflects the worth of the business as an on-going entity, based on recent performance attracting and retaining customers and financial success.
An “asset sale” is selling the assets and property (if applicable) of the restaurant even though it may not be in a cash flow positive position. The buyer may or may not keep the name and menu going forward. This is the only option if you are not making money in your restaurant.
Meeting with an expert restaurant broker to discuss both your motivations for selling and expected pricing can help you answer these questions and will most likely make your experience in selling a restaurant more effective and efficient.