We understand that selling a restaurant is a significant decision that requires careful planning and execution. To ensure a successful sale, there are certain steps that restaurant owners must take to prepare their business for the market.
In this article, we’ll provide a pretty comprehensive guide on how to sell your restaurant in the United kingdom, including valuable tips, tricks and advice for getting the best sale price and attracting potential buyers.
Preparing for the Sale
Before you put your restaurant on the market, it’s essential you take the necessary steps to properly prepare your business for sale. This includes assessing your financials, creating a marketing plan, and making any necessary repairs and smart upgrades to your restaurant.
Assessing your financials: Potential buyers will want to review your financials, including your revenue and expenses, profit margins, and cash flow. It is crucial to have accurate financial records and to be able to demonstrate the profitability and growth potential of your business to potential buyers.
Creating a marketing plan: A well-planned marketing strategy can help attract potential buyers and increase the sale price of your restaurant. This includes developing a comprehensive listing of your restaurant, highlighting its unique features and location, and if you want to get the highest sale price possible, promoting it on relevant social media platforms and business-for-sale websites so that you can try find a buyer without using a broker.
Making necessary repairs and upgrades: Buyers are likely to scrutinise your restaurant for any necessary repairs or upgrades. Consider making any necessary repairs, deep-cleaning your restaurant, and making careful choices about updating equipment or the decor to improve the overall appearance and appeal of your business. This has to be done thoughtfully, sometimes a £1000 upgrade can give a £5000 valuation increase, but if your maths shows it costing more than it’ll earn you, then save your money.
One of the most critical steps in selling your restaurant is determining its value. Several factors can influence the value of your restaurant, including its location, financial performance, lease terms, and competition.
To determine the value of your restaurant, consider working with a business valuation expert who can assess the financial and non-financial factors that impact the value of your business.
If you’re looking to value it on your own, try compare to the past and the present. What did you pay for the location when you bought it? How much has it improved since then? What have other businesses similar to yours in the local area sold for in the last 5 years? Not all of this information is public, so it might be worth using your contacts to speak to other people in the area who’ve sold up shop.
Once you have prepared your restaurant for sale and determined its value, the next step is to market your business to potential buyers.
Creating a comprehensive listing: A well-crafted listing should include high-quality photos, a detailed description of your restaurant, financial and operational data, and any unique selling points that differentiate your business from competitors. This is an unbelievably important step, and we believe there’s no such thing as too much information. This is your chance to really catch attention, so ask yourself ‘Would this listing make me buy this business?’.
Promoting your listing: There are several ways to promote your restaurant listing, including using business-for-sale websites, social media, and networking with industry professionals. To get the highest value possible for your business, the key is having a selection of buyer choices who are very interested. If only one persons bidding, they won’t bid as high. We recommend using Dinabite to share on Social media, as it’s cross-posting abilities make it very easy to be reaching buyers on the most number of social media platforms possible. If you only have a Facebook, and your highest potential bidder uses Twitter? They’ll never see you, and won’t be as interested even if they do.
Working with a business broker: A reputable business broker can help market your restaurant to a wider audience of potential buyers and negotiate on your behalf. This isn’t a requirement, and if you’ve got a great business in a great area, might not even be necessary, but it’s worth considering if you’re looking for a speedy sale or struggling to find a buyer.
Once you have attracted potential buyers and received offers for your restaurant, it is time to negotiate the sale. Negotiating a successful sale requires careful consideration of several factors, including the sale price, payment terms, and any contingencies.
Sale price: The sale price should be based on the value of your restaurant and the market demand for similar businesses. It is essential to consider the terms of the sale, including any potential earn-out provisions, and ensure that the price is acceptable to both parties.
Payment terms: The payment terms should be agreed upon by both parties and should consider the buyer’s financing options and your desire for a quick sale.
Contingencies: Contingencies should be included in the sale contract to protect both parties from unforeseen events, such as a failed inspection or lease renewal.
Selling a restaurant in the UK requires careful planning, preparation, and execution. By following the steps outlined in this article, you can maximise the sale price of your restaurant and attract potential buyers.
Remember to assess your financials, create a comprehensive marketing plan, determine the value of your restaurant, promote your business with Dinabite to potential buyers, and negotiate the sale terms carefully. With proper preparation and execution, you can successfully sell your restaurant and move on to your next venture.
If you’re looking for more advice on restaurant marketing, you should download our free Ultimate Guide to DIY Marketing for Restaurant Owners, which covers everything you need to start bringing more people into your restaurant and start making more money.