Following these guidelines will make selling your restaurant or cafe a much easier (and more profitable) process.
Boat owners say the two best days of their life are the day they bought it and the day they sold it. Is it the same for restaurant and café owners?
The process can take many months, so get started straight away. The best time to sell is when income is growing, not when it is flat or declining, but most people are two excited in the growth stage to sell – it’s human nature.
Paint, polish and tidy up the business.
Spend money on cosmetic improvements, just as you would if you sold a house. Throw out broken equipment, scrub down the surfaces, buy new cushions and replace broken tiles. Ask for an outsider’s opinion – ‘owner blindness’ is a well known problem.
Put together written systems.
Buyers love good, easy-to-follow systems. Your Operations Manual is an important asset: opening and closing checklists, recipes, repair lists, phone lists, instructions for equipment and costing methods.
Prepare an inventory of all the equipment, furniture and utensils.
Make sure you have clear title and ownership for everything you are planning to sell. Check that equipment leases can be transferred.
Prepare your business figures.
Buyers are suspicious, and rightly so. The more transparent you are, the more you will keep potential buyers interested. They want to know that you are really making a profit, and banks will only lend on tax return figures – being helpful to them will help you too.
Streamline the business, without losing the character.
Simpler recipes and easier cooking. Trim the wine list and simplify the function menus. Say goodbye to staff who are not contributing 100 percent. Is it an open sale or a 'secret sale'? Many sellers prefer to maintain secrecy but sooner or later the staff will find out, so be prepared for all possibilities.
List with a broker.
They usually sell a good business more quickly as they are dealing with buyers all the time. If you do a private sale, be prepared for tyre-kickers and curious competitors. Promote widely – the broker will advise on the best approach. The more complex the business, the lower the resale price. Five day businesses usually sell for more than six or seven day operations – people will pay a premium if they can also ‘have a life’.
Organise your legal adviser and accountant before the first inquiry
Your contract, inventory and lease should be ready for inspection. Be ready to advocate with the landlord if the purchaser wants amendments to the lease. Have copies of local government approvals and the liquor license available. The more you have ready, the more trust you build.
Selling can take many months, so keep the business strong and vibrant with everything in good repair. Make sure inspections create a good impression – they can happen at any time, often as 'mystery visits' that you don't know about.
When the offer is accepted, a deposit is paid and the contracts are exchanged. There may be a trial period for one or two weeks, which will need a daily audit system. This is the time to be around the business for every minute that it’s open. Trial periods show that this is a quality business that’s ready to guarantee its figures. Final settlement will be subject to the agreed figures being achieved.
On completion of the sale, the final balance is paid. There may also be valuation and payment for trading stock, and staff wages and leave entitlements to be worked out. Have stock sheets prepared so the stocktake is quick and easy. After settlement there may be an assistance period (often one or two weeks) when you should be available to give advice on suppliers and operational issues.
Finally, it’s time to open the bottle of champagne you kept aside, and call the travel agent to finalise the holiday - enjoy your new life!