How To Get A Higher Price When Selling A Restaurant
Gary Occhiogrosso writes about how to get the best price when selling a restaurant.
It’s 2019 and after years of hard work you’ve now decided to sell your restaurant, perhaps to open a different business, or retire or relocate. Whatever the reason, selling a restaurant requires a strong strategy, careful planning, and detailed preparation. In this article, we’ll explore some essential tips and steps needed to put you on a path for a quicker sale at the highest possible price along with a smooth transition.
Obvious points are covered, yes, like ‘curb appeal’ and sprucing the place up. But he goes into some detail explaining what that actually entails.
However, move past the obvious and you’ll come across information on getting your finances in order, accumulating the right legal and other paperwork likely to be needed during the sale process, finding and vetting a business broker, dealing with buyers etc.
Unfortunately, there are no great insights on how a restaurant owner can tilt the scales in his favour, what concrete steps he can take to add value for the buyer, what arguments he could use for a higher valuation. For example:
- when vendors are willing to offer some degree of seller financing (deferred payments) they can generally expect a slightly higher price
- when vendors remove or reduce risk for the buyer (perhaps by guaranteeing in writing a certain level of sales/profit in the first year post sale) they can expect a higher price
- when vendors commit to a long handover period or a period where they guarantee to continue working for the business, this adds reassurance for buyers and frees them up to pay a higher price.
Related: How to impress investors and buyers (so they pay more)