How To Sell My Cafe Business
Selling your cafe business is not dissimilar to selling any business, however cafes are often owner operated and owners are working long hours and trading 7 days a week (sound familiar!). As much as you are busy, the time you now put in to selling your business will pay off. Many café owners have already decided to sell, long before they put it on the market for sale.
A good business should ALWAYS BE FOR SALE especially for the right price! It is often best to sell when your business is ‘on the up’, or prior to your busy season. When selling for a good reason, you are often in a better negotiating position to get the best price possible for your sale. But don’t beat yourself up if you are not ready, perhaps timing is more the issue. No matter what the reason, the decision has already been made!
Know the Reason why you are selling.
No one knows the business better than you but the first rule of thumb “It is the BUSINESS you are selling and NOT YOU!” Prospective buyers don’t want to hear how hard it is for you, or how hard it has been to get the business to where it is, or even how good YOU are! They want to know about the BUSINESS. So make a list of all the benefits of your Café. Things like:-
Know the benefits of your cafe business.
No matter what the reason, you probably already know why! Don’t make the mistake of putting it off so far ahead that it doesn’t get done. The last thing you want is to keep the business longer than you wanted because more often than not you will get tired and lose interest in the business and possibly have less profits.
- Years of trading – (this can include your time and any previous owners).
- The specialties of your café; like special foods, recipes, your service, your point of difference!
- Talk about your staff, the cleanliness of the shop, the type of customers.
- The benefits of the location like: ‘great foot traffic’; ‘surrounded by other excellent businesses’, or very reasonable rent!
- Talk about your competition, if you don’t the prospective buyer will!
- Further potential is also worthwhile including as it demonstrates to the buyer that there are other things they can try. This could be as simple as setting up a website, or doings some catering, or even organising social events at the café. No matter what the business, there are always other ways to attract more customers.
- Future development of the area.
List all of your assets.
This is easy to do. Just list all the items that you have in your cafe, right from refrigerators, to display fridges, to cash registers, ovens, grills, hotplates etc. You may find that this has already been done, as you may have a depreciation schedule in your financials. Some cafes also have certain equipment like a coffee machine that is leased, so these should be included on your list with any financial commitment details. Tip: Check with your accountant.
Get your documentation ready.
If you are renting the premises your café is in, then get a copy of your lease. The buyer will want to see these arrangements. Often a business has plenty of options (i.e. 5×5 years), or even if you have a month by month lease. No matter what type: put yourself in a buyer’s shoes, wouldn’t you want to know that when buying your business that a secure lease is, or can be put in place.If you are fortunate enough to own the premises, then consider whether or not you are selling the premises with the business. Alternatively, you may want to keep the premises and just sell the business and lease the premises to the new owner.
Profit and Loss
No matter what the financials are, a prospective new buyer will want to see them. Usually the last 3 years of trading are acceptable and depending on the time of the year you are selling, it is acceptable to only have up to the previous financial year. If you are like most small businesses, then your financials will be up-to-date or just over 12 months old. Your financials should not be shown until you have a genuine interested buyer. The buyers are initially interested in what they see and what you are telling them, like the benefits and the future opportunities.
Is it hard to sell my cafe without broker?
No it’s not. Remember, you have owned and operated your cafe for a while now and you know your business inside and out. Certainly better than any Broker would. If you have done all of the above, then you are well on your way and ready to market your cafe for sale. Until you start advertising your business for sale, then you won’t know who is interested. Getting the right advertising exposure to attract the buyers to sell your cafe is very important. A broker would use major sites to list your business for sale, but you can to. The biggest differences are that you have control over who is looking at buying your business and when you sell, you won’t be paying any commissions whatsoever. The benefits of selling privately far out way selling those through a broker. Of course a Broker will tell you differently. You have worked a long time in your business and brokers often charge very hefty commissions, like 10%. 10%!!!! of the whole business sale price. That’s 10% of your equipment, 10% of your good name and 10% out of your pocket. You may have already purchased your business previously, or even paid for a new set-up. So be well informed how much it is really costing you to sell through a broker.
Example: In 2013 you purchased your business for $130,000. During the running of your business you have replaced equipment items (value $30,000). You have also increased the revenue. Today your business is worth $260,000. So if a broker is charging 10%, then you will need to pay them $26,000 + advertising costs (lets round it to $30k). Your profit from the sale is the sale price ($260k) less your original set-up and extra expenditure ($160k) – profit is $100k. So $30,000 to your broker is 30%! You’re the one who deserves this, not the broker.
Get it online to sell privately – It’s Easy and here’s
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