|
|
 |
|
Questions Sellers Ask
|
You've devoted time, money, and energy into opening, building, and operating your business. It's been your life. But now you want a different life; you want to sell your business.
You know restaurants. But do you know how to market and sell restaurants? Probably not. And, that's why you should consider working with a professional restaurant broker – someone who can make the difference between your just getting out of the business or getting out of the business with the best price and terms.
The following answers, based on knowledge from our years of experience in restaurant ownership, management, and sales, address the most common questions we hear from restaurant sellers
|
|
General
|
|
| General
|
Q: What can restaurant brokers do? What can't they do?
A: Restaurant brokers are professionals who specialize in the sale of restaurants and food-service-related businesses. As your broker, we can help price your business and structure the sale to maximize the benefit to you and the buyer. We can find qualified buyers and work with you and the buyer to negotiate and coordinate the transaction and bring it to a successful closing.
However, we are not magicians. We can't sell overpriced businesses. Restaurants sell if the price, determined by the marketplace, is right and the terms are reasonable. Of course, down payment and seller financing can increase the prospects for a timely sale. |
Q: How long will it take to sell my business?
A: The average is three months to one year, but that's just an average. Some restaurants stay on the market longer than a year; others may sell in the first month. The sooner we have all pertinent information to establish a realistic asking price and begin marketing activities, the sooner we can sell your restaurant. Realistic pricing is the key. Some sellers set a high price, believing they can reduce the price later. Unfortunately, buyers often refuse to even consider overpriced businesses.
Down payment is another factor that influences time on the market. A lower down payment – generally 30% or less of the asking price – produces a quick sale. A reasonable down payment shows that the seller is confident the business can support the payments. |
Q: Why is seller financing so important?
A: Surveys show that a seller who insists on all cash, receives, on average, 70% of the asking price – if the business sells. Those who accept terms receive 86% of the asking price on average. Reasonable terms dramatically increase your changes of selling – and decrease the time from listing to sale. Plus, the interest a seller receives by financing a sale provides additional funds. And, as with a reasonable down payment, seller financing tells the buyer the business can pay for itself. |
Q: What happens after you identify a buyer for my business?
A: When we find an interested buyer, we'll prepare an offer or proposal for your consideration. There may be one or more contingencies in a proposal, such as reviews of financial records, lease arrangements, franchise agreements (if applicable), and other pertinent business details. Most offers have pluses and minuses.
After you've carefully reviewed the proposal, you can accept the terms or make a counter proposal. You should understand, however, that if you refuse the offer, the buyer may withdraw it at any time. Conventional wisdom in restaurant brokerage is that "the first offer is generally the best." This doesn't mean you must accept the first – or any offer – just that all offers should be carefully studied.
Once you and the buyer agree, we'll work with both of you to satisfy and remove all contingencies. Your cooperation, including working with any outside advisors retained by the buyer, is critical at this stage.
When all contingencies are removed and final papers drawn and signed, we'll schedule the closing. That's when the money is distributed and the new owner takes possession of the business. As your restaurant broker professional, we'll be with you through the entire sales process. |
Q: What can I do to help sell my restaurant?
A: You can cooperate fully with us and with any other professionals involved in the transaction. A buyer will want up-to-date financial information; you or your accountant must make current information available. If you decide to use your own attorney for the closing, be sure the firm is familiar with the business closing process, understands the real estate laws in your state, and can participate in the closing on short notice.
Generally, you and the buyer will want to close the sale quickly, usually within a few weeks, unless there is a delay in obtaining an alcohol or other license. You want to avoid closing delays, especially those caused by an attorney's failure to prepare closing documents or inability to attend the closing.
The common goal of everyone involved in selling your business should be to get the best price and terms available in the marketplace and to close the sale as quickly as possible. That's certainly our goal. We work for you, and we need your cooperation to handle your business interests in the most efficient and effective way possible.
We hope these answers have helped you. If you have additional questions, please call one of our offices for answers. |
|
|
