Thou SHALT price realistically.
Don’t overprice or under price your business. A high price discourages qualified buyers and many buyers will not make you an offer for fear of offending you. Over-priced businesses are on the market for a longer time. This increases the chances of your employees, suppliers or customers discovering that you are selling. This can cause employees to leave and suppliers to put you on COD.
Thou SHALT prepare a professional business offering package.
Include the information that buyers need to see; i.e., leases, equipment lists, copies of menus, liquor license information, profit & loss statements and income tax returns. If you have poor books & records, then you need to IMMEDIATELY start recording sales and expenses. You will have to prove these to a buyer. Buyers will become suspicious and lose enthusiasm if they have to wait for your basic information.
Thou SHALT NOT fail to bring the deferred maintenance up to date.
Prior to putting the business on the market this is highly recommended. When buyers see items that need fixing then they often wonder about the condition of things they can’t see. Sometimes the smallest detail will turn the buyer away.
Thou SHALT prepare a purchase agreement form prior to finding a buyer.
You should be prepared from the beginning to take an offer. If you do not have a purchase agreement, then hire a professional business broker or attorney. You need to make it easy for yourself and the prospective buyer to receive/make offers when you have a deal. BEWARE: Attorneys are sometimes slow in drafting agreements and you may lose a buyer’s enthusiasm if the purchase is delayed.
Thou SHALT look for a buyer in as broad an area as possible.
Don’t depend only on websites to produce leads. Depending on your restaurant concept, price and financial records, you may be reaching a fraction of the target market. The way to get the optimal price is to have as many qualified buyers as possible. Consider using local newspapers and direct targeted mailings. A high volume or high profile restaurant may warrant national advertising in various medias.
Thou SHALT qualify potential buyers immediately.
You need to know about the financial strength and business skills of an interested buyer before you give out confidential information on your business or spend a lot of time with them. Generally, restaurants should be sold to experienced restauranteurs.
Thou SHALT NOT fail to confirm your leases.
Make sure your location and equipment leases are transferable before you look for a buyer. The number ONE reason deals fall apart is because the landlord will not approve a new owner. This is often a ‘profit’ opportunity for your landlord. If your remaining lease term is short, negotiate a new lease prior to offering the business for sale. If you do not do this, the real estate owner can lease the property themselves and reap the benefits of your hard work.
Thou SHALT get everything in writing.
Make sure that every agreement of the transaction is clearly stated in writing, including all contingency removals and equipment lists. People quickly forget what was said and not written which frequently leads to arguments and then lawsuits.
Thou SHALT follow correct procedures.
Most restaurant sales involve some aspect of seller-financing or escrow after the sale closes. If you are financing part of the sale, use an escrow company or attorney to ensure that correct procedures are followed. This includes UCC/lien searches, completing any necessary filings in your city/county/state, security agreements, etc.