Decided it's time to sell your restaurant and move on? Just like selling a home, it's important literally to get your house in order. Here are three ways to get started.
1. Keep accurate books and records, and prepare an accurate valuation analysis.
With today’s bookkeeping technologies such as Quickbooks, keeping good books and records has never been easier for restaurant owners. Spend the money for a good bookkeeper to help keep the financials in order.
Having good books and records spells the difference between selling your restaurant fast and for top dollar and having it sit on the market for months and never selling at all.
But having accurate books and records is only part of the process. A skilled restaurant broker with a deep understanding of financial statement analysis is just as important as the books and records. A broker will dig into the financials and recast them to determine the owner’s discretionary income and then apply the appropriate multiple to the owner’s discretionary income.
2. Get your restaurant organized and staged.
In the real estate business, it is commonplace to stage a home to obtain top dollar as well as sell the home fast. These same principle applies to a business.
Start by having your property professionally cleaned—then maintain it. Be sure to turn the kitchen into a clean, organized, well-oiled facility. Finally, spiff up the dining and bar area by adding flair and class to it. Property stagers can help you do a makeover at a reasonable price. Find one in your area.
By the way, often making over the dining area will not only boost food sales by 10 percent or more, but spending just a few thousand dollars in the dining room can justify as much as a 10 percent jump in prices.
3. Work with a knowledgeable real estate professional.
Don’t underestimate the value a good restaurant broker brings to the table by packaging your restaurant for the market. This means:
• Preparing a thorough valuation analysis
• Reviewing the lease to understand the potential pitfalls in transferring it
• Researching the restaurant’s history to understand its strengths and weaknesses
• Viewing the operation subjectively and looking for ways to improve it
• Comparing your restaurant to other operations in the market
These three simple steps are the difference between having the restaurant quickly sell for top dollar or sitting on the market and never selling at all.
Mel Jones is the c.e.o. and president of sellingrestaurants.com, a restaurant brokerage firm.