Do you want to learn how to sell a restaurant for the most money — that is, for maximum profit? People have talked about it for years. Many reasons lead people to put their business up for sale: retirement, a change of career, or simply wanting to move on to other opportunities. Whatever your goals, having a better understanding of the process can help you get the most out of your deal.
This blog post guide can serve as your guide and help position yourself for success when selling a restaurant. We also provide useful tips, from increasing your asking sales price to ideas for marketing your strengths effectively.
Keep reading if you want to ensure your establishment goes for top dollar!
What to Consider Before Selling a Restaurant
To ensure a smooth and straightforward sale, you might want to consider many factors before the selling price of your restaurant:
- The people involved: In the Restaurant industry, selling can become a messy process with other individuals involved, such as friends and family members. Resolving these issues early and determining how the sale will affect these people is key to a successful transaction.
- Your goals: Before you start the selling process, it’s crucial to clearly set out your goals. When working with a trusted business consultant can help you define your objectives and create a plan of action.
- Your schedule: The ideal average restaurant sale timeline varies for each person, but generally, you want to start preparing at least a year before listing. This will give you enough time to spruce up your business and maximize its value for buyers.
What Are the Preparations Involved in Selling My Restaurant?
Now that you’ve set the conditions for the sale, it’s time to start preparing your establishment. Let’s go over some of the considerations and actions involved:
Doing your due diligence and gathering all the necessary documents will significantly speed up the sale. While relevant paperwork can vary from state to state and even by county, you should generally have the following in hand:
- All your documented assets
- A copy of the restaurant lease
- Copies of licenses (sidewalk patio permits, liquor licenses, etc.)
- Financials (federal tax returns, profit and loss statements, sales reports, etc.)
- Copies of architectural plans
Are your licenses up to date and compliant? Do your health inspection records show any violations? Compiling these documents can also help you see your restaurant from a buyer’s perspective and address any issues to improve its value.
Stage the Establishment
Creating a positive impression is essential when having the right price for the right buyer. Minor updates such as sprucing up the decor and investing in attractive signage can make all the difference for potential customers and business buyers.
Some other cost-effective upgrades that can attract buyers include:
- Repairing any outdated appliances or equipment
- Painting the walls and replacing old tiles
- Sprucing up the bathrooms
- Cleaning carpeting and flooring
- Making the restaurant more energy-efficient
Depending on the condition of your business, you may want to consult a contractor or an interior designer. Even seemingly small details can significantly affect the final price!
Evaluate the Restaurant’s Value
Once you’ve prepared the paperwork and staged your establishment, it’s time to figure out the restaurant’s value. While you can get a rough estimate through online calculators and research, getting an appraisal is the most effective way to get the most profit.
An experienced broker will know how to sell a restaurant and evaluate it based on its condition, profitability, local competition, and other factors. This evaluation can also help identify areas you can improve to increase the value of your restaurant.
Market the Business
Once you take all the steps mentioned above, it’s time to market your restaurant. Online platforms like Facebook, Instagram, and Twitter lets you engage with thousands of people in your area so they can learn about your business’s features. You can also post ads, brochures, and flyers around the area.
Consider these questions when looking for potential selling points:
Does Your Restaurant Have a Good Spot?
Location is everything! Having nearby popular attractions or public transportation can help attract potential buyers. Always highlight your restaurant’s visibility, parking space, and access to other amenities when applicable.
Can the New Owner Capitalize on Scarcity?
Restrictive zoning laws might make it difficult to open a new restaurant. Maybe you have a liquor license in an area where it’s difficult to obtain one. Make sure potential buyers know these details because scarcity can be a valuable selling point.
What Are Your Business’s Special Features?
From beautiful views to well-maintained outdoor seating, highlighting your restaurant’s features can help you stand out from competitors. Even simpler things like a great sound system can give buyers more reasons to invest in your business.
Prepare for Closing and Sell My Restaurant
You, the buyer, agents, brokers, and any other involved parties must agree on a closing date. During this meeting, you will provide documents and essential information like:
- Bill of sale: This document serves as legal proof that the transfer of ownership has taken place.
- Settlement sheet: A settlement sheet is an itemized list of the costs associated with the purchase and sale of a business, including closing fees.
- Obligations: You need to inform prospective buyers of existing contracts with third-party vendors, 1099 employees, and other legal commitments.
- Lease agreements: Give the buyer a copy of your current lease agreement, including rent and termination clauses.
- Confidential information: Finally, ensure to provide the buyer with the passcodes, contact lists, and other necessary training and support to run your restaurant effectively.
You and the buyer will sign the necessary documents to officially pass the ownership. Depending on the complexity of your deal, you may need additional documents to ensure a smooth transition and successful close.
Why Partner with a Professional Broker If I Want to Sell My Restaurant?
Learning how to sell your restaurant and how to value a restaurant business can be difficult and time-consuming. What’s worse, you can spend all your energy trying to get the best possible deal and still not reach your desired outcome—this is where we come in.
Working with experienced professionals like Sacramento Business Broker can make the entire process much smoother, granting you access to tips and advice from industry experts.
When you work with our team, you can expect the following:
- Access to a network of prospective buyers: We understand the Northern California market and can match you with interested buyers looking for restaurants like yours.
- Customized marketing plans: We create customized strategies that focus on your restaurant’s strengths, helping it stand out from the competition.
- Negotiation support: Our team will help you discuss terms, reach a deal, and finalize the sale quickly. By partnering with us, you can get the best possible outcome from selling your restaurant.
- Discreet and professional services: You don’t want your current employees and customers to know you’re selling your restaurant before closing the deal. We can help keep your sale on the down low while also providing you with helpful advice and support every step of the way.
Call Us Today
Did you Google “how much is my restaurant worth” or “selling restaurant business” and find us? Whether you already have a restaurant business for sale or you’re just starting to explore your options, we can help.
Sacramento Business Broker knows how to sell a restaurant and can help you maximize the value of your establishment. Call (916) 587-7850 today to get started!