Are you ready to sell your restaurant? Sure, the commission that a business broker will take might seem like a lot on the surface, but going it alone can end in real disaster.
This strategy often backfires because of one simple thing. You are a restaurateur. You are great at running your establishment, at serving customers delicious food and at keeping a happy staff. What you are not is good at selling businesses. First of all, it can take an average of 9 months to a year to sell your restaurant once it’s listed on the market. Does a successful restaurant owner really have the extra time to spend working on the ins and outs of a business for sale, dealing with all of the legal and red-tape issues that will arise, as well as fork over the expense to do all of the necessary marketing? The answer is probably not.
Is a business broker really worth the commission?
Yes, absolutely. Think of what the broker will be doing for you during the business sale transaction not as an added expense, but as a list of responsibilities and expenses that you don’t have to do.
A business broker who has knowledge and experience in the restaurant market will first of all be able to give you an accurate and objective evaluation of the asking price for your establishment. As an owner, you are emotionally attached to the restaurant you’ve created and grown, but the reality of the market is that your restaurant is only going to sell for what someone is willing to pay for it. A good broker knows the market, knows what comparable restaurants have actually gone for, and probably most importantly knows what buyers are looking for. A good broker will also be able to advise you about any changes, fixes, or adjustments (be they cosmetic touch ups and cleaning or how to organize your financial information to make it easy for a prospective buyer to understand) that will help your restaurant sell.
Another major aspect that a broker brings to the table is confidentiality. You definitely don’t want your competition, your staff, your vendors, or your customers to know the restaurant is for sale. A vendor might blab to the competitor down the street, your staff could jump ship and take all of their loyal regulars with them. A business broker brings prospective buyers who are serious about potentially buying your restaurant and who have signed all of the appropriate non-disclosure agreements prior to learning which specific restaurant is for sale. This not only keeps out time-wasting buyers who don’t have the ability to buy your establishment, but also allows for a control of information that you would not be able to achieve yourself.
Your broker will also be able to get your restaurant out there to anyone who is looking without disclosing that it is actually your business for sale. Your business will be marketed on the web, to other business brokers and their clients, and to the list of buyers that your broker already has. Any broker who is experienced in the restaurant game will have a list of folks who are looking specifically for restaurants, so the resources of the broker will be invaluable because they can bring such specific buyers to the table.
Ask your broker how many restaurants they have sold. How many restaurants have they sold in the last year? If you don’t like their answers, then perhaps it is time to seek the services of a more qualified restaurant broker.
Are you a restaurant owner who has tried to go it alone without much success? Are you curious about what an experienced restaurant broker could bring to the table for you? Leave us a comment or question here, and we look forward to assisting you.
Want to read Selling a Restaurant: Mistakes You Don’t Want to Make, Part 1-Using a Real Estate Agent? Click here.
Want to read Selling a Restaurant: Mistakes You Don’t Want to Make, Part 3-Pricing Your Restaurant Too High? Click here.