Don’t overlook these Top Restaurant Deal-Killers, or your deal may go down the tubes!
Top Restaurant Deal-Killer # 1: Real estate lease
The sale of your business is a profit opportunity for the landlord. If you’ve been a great tenant, WHY would the landlord WANT to transfer the lease or release you? So …. Start early:
a) If you have less than five years left on your lease, get an extension or an option to 10 years, or longer before you go to market
b) Discuss with your landlord that you are considering selling. Determine their attitude towards a new tenant and new lease (or the assignment of the existing lease).
Top Restaurant Deal-Killer # 2: Financing
Your Income Tax returns are the deciding factor in bank financing. Yes, you may have been expensing all types of non-business items and, to the extent that they are provable and verifiable, a purchaser and his/her lender will accept these add-backs.
a) Commence immediately reporting all sales and expenses accurately to the government. Good financial records are essential.
b) Make sure all required tax returns have been filed.
c) Have your accountant prepare an interim financial statement, accurately showing the business in its best possible light.
Top Restaurant Deal-Killer # 3: Liquor license
A purchaser must meet several basic requirements to obtain Texas food-beverage licenses. We always recommend the use of an experienced liquor license agent …. They will save time and reduce your stress.
a) Texas resident for minimum 1 year
b) No felony convictions
c) Must be able to post bond
And, while we’re at it, here’s a few more general pointers:
- Be a ‘nice guy’ to your landlord, neighbors, bank, and city/county/state officials
- Aggressively promote your business to build sales. It is in your best interest to increase sales as much as possible to get the best price and the quickest sale.
- If you were selling a car, you would have it detailed. Do the same with your restaurant … Fix up, clean up, and paint up; by spending hundreds you will return thousands!
- Take care of your key employees. Turnover is notorious in our industry … the longevity of a few key people within your business will increase its attraction.