By Greg Kells
Most restaurant owners focus on a business broker’s ability to find buyers but spend minimal time discussing strategy, documentation, marketing, creative structuring, value enhancement, financing, diligence, confidentiality or executing a professional sale process — yet that’s where the real value of such services to restaurant owners is captured. So what value does a business broker bring to the process of selling a restaurant?
A trusted and experienced business broker will have:
- An inventory of clients interested in purchasing a restaurant;
- A website that is actively attracting buyers; and
- A screening system that educates buyers and steers them to fun and satisfying businesses within their means, with their desired lifestyle, and matching their skill sets and experience. Confidentiality is maintained all the while so staff, customers and suppliers do not know you are thinking of selling.
Adds credibility — Engaging an experienced business broker shows the parties involved that there is a genuine commitment to sell and with professional representation, thus increasing the likelihood of a successful closing.
Preparing the restaurant for sale — Sellers are rarely prepared for the intense scrutiny they’ll face from buyers and their professional advisers. Business brokers such as Sunbelt help restaurant owners prepare for everything from valuation, detailed financial models, projections and in-depth market analysis, to working with the owner’s professional advisers to minimize tax and risk.
Educating and coaching the owner — Most restaurant owners have never sold a restaurant. Experienced business brokers such as Sunbelt have managed hundreds of restaurant sales and bring the benefits of this experience to the owner. Often, minor changes not obvious to the owner can create significant increases in the restaurant’s value.
Managing the sale process — Business brokers are quarterbacks for the sale process—responsible for keeping it competitive, coordinating all the various aspects of the sale, including a team of other advisers (appraisers, lawyers, accountants, bankers, insurance agents, landlords), and keeping the sale moving to a closing.
Negotiating the deal — Business brokers take the lead in negotiating the terms — not only purchase price but also the terms and conditions, timing, process and other major considerations of the sale. This often includes source financing for the buyer and working with the landlord to obtain a lease assignment or new lease.
Structuring the deal — Sales can involve various forms of consideration, such as cash, equity, seller notes, earn-outs, and other forms of contingent consideration. Business brokers structure each transaction specifically to address the needs and desires of both sellers and buyers, providing creative solutions for potentially conflicting objectives.
Enabling owners to continue running their restaurant — Sellers find the sale process intensive, especially as they are trying to run the day-to-day operations of their restaurant. By taking on most of the day-to-day work, business brokers let restaurant owners focus on growing their business rather than managing the sale process, which typically lasts some three to nine months.
Where business brokers add the most value
Previous sellers ranked “Managing the sale process” as the most important of the eight core services Sunbelt provides for restaurant owners. The service they ranked as least important? “Identifying and finding a buyer.” That’s because our brokers do much more than just finding the buyer, according to previous clients who have relied on us to sell their restaurant.
Whether it’s your first and only restaurant or one of many, an experienced and trusted business broker like Sunbelt will focus on all that’s needed to get you the most for your business while you continue to place your attention on its day-to-day operation.
About the author:
Greg Kells is President of Sunbelt Business Brokers, Canada’s largest business brokerage. With offices across the country, Sunbelt helps restaurant and foodservice business owners to maximize their selling price, reduce taxes, reduce risk and take the hassle out of selling. They also help many budding entrepreneurs to make the right choices in acquiring a business that works for them and matches their financial resources, skill, experience, and lifestyle goals. As you have seen in the preceding article, selling is a complex process! Contact Sunbelt Business Brokers for a free book on the selling process and for help and guidance. Visit http://sellyourrestaurant.info or www.sunbeltcanada.com. 1-800-905-3557