Selling your café or restaurant almost never gets completed overnight. There are many documents to prepare, people to meet and factors to consider. While predicting a definite timeline for closing a business sale may be nearly improbable, you can totally speed up the process through several means. Knowing how to find business buyers is one of them.
Here are six ways to identify your buyer and bring your business closer to them:
1. Know what type of business buyer you need.
Anybody with sufficient funds can buy your café or restaurant. It could be a friend, a relative, an employee, your partner, or even your competitor! Each prospect will have different reasons for buying your business—reasons which you can use to your advantage. Knowing the kind of business buyer you need will allow you to alter your pitch to raise your price or gain more benefits. Here are the types of buyers you will most likely encounter:
- Financial buyers
These buyers, as their classification implies, are interested in the financial takeaways that can be derived from your business. They want profitability and stability and as such, may have specific demands regarding pricing and income. They will pore over your books and business records and will tend to bargain aggressively. These buyers often want an established business that requires little change or intervention.
- Strategic buyers
These buyers are more interested in the strategic advantage offered to them by buying your business. These could be individuals or companies who are set to benefit from removing your business from the competition or incorporating it into their own group of businesses. For example, a competing restaurant can buy your own restaurant to eliminate you from the competition. These buyers are often prepared to pay more than other types of buyers, especially if your business is aligned with their own products or business goals.
- Operator buyers
These buyers are looking for a successful business from which they can derive income. Their goal is what sets them apart—they want your business so they can support their lifestyle. They typically lack resources and experience in running a business so transacting with them can be quite risky.
- Business insiders
These are buyers who know a lot about your business and whose main motivation is often personal. At times, it is to see your business continue on. These buyers are often your friends, relatives or employees. While they may be willing to pay more for your business than some financial buyers, they may not have enough resources to pay for the business outright.
2. Hire intermediaries—you’ll need them.
You may have operated your restaurant for years, but it doesn’t mean you know the twists and turns of business sales. Selling a business, even if it’s just a small café, can be complicated especially for a first-timer. An intermediary will ascertain the true value of your business and will help you gain the most out of the sale.
You will need to hire a different intermediary depending on the demands of the business sales process. Brokers are a safe and popular choice. The scope of their duties may depend on your agreement and may range from helping you get the word out about the sale to arranging the paperwork. They usually have an existing database of buyers looking for businesses for sale, so having them on your team will take away much of the guesswork, eliminating a huge chunk of the stress out of the selling process. You will have a huge advantage over other sellers if you choose to work with a specialist broker.
3. Qualify your business buyers.
Prospects are relatively easy to find, but not all of them are into actually buying your café or restaurant. To sift the actual buyers from the lookers, you need to qualify your prospects. This not only brings you to the persons who are truly interested, it also saves you time and resources by allowing you to focus on parties with a greater chance of giving you your intended returns.
Your broker can qualify or pre-screen your prospects for you—yet another reason to hire an intermediary—but you need to know how to do it as the ultimate decision will always come from you. Before you reveal more details about your company, make sure that the prospect has signed a confidentiality agreement. You can also go over the prospect’s background to make sure that they have the finances and the experience to buy and manage your business.
4. Make your business attractive.
Why spend too much time or resources looking for buyers when you can have them come to you? The key is to make your café or restaurant appear as a very attractive investment. A good way to start is to conduct an audit on your current resources and iron the kinks out of your finances. You can ask help from an accountant in getting your financial documents prepared for the important due-diligence stage that your buyers will likely want to perform on your business. Check your business for malfunctioning equipment. Are your water heaters running ok? If not, hide them away or get rid of them some other way. Do something about redundancies that may be costing you unnecessary costs. Know that speeding up the selling process involves making your buyers understand that their payment will yield benefits for them.
5. Make sure your buyers see your business.
Your chances of closing a deal may only be as good as your effort in making your business visible to buyers. Take advantage of your broker’s buyer database. Use social media and technology to get the word out. There are plenty of websites available today that cater to business sales, with some offering their services to specific sectors and industries, such as the hospitality industry. This strategy works best with step number four.
6. Be open to options.
Some tried and tested ways of selling businesses may not work for your café or restaurant so it pays to keep your options open. Will you need more than the number of ads you have published? Will you need to make use of other websites? Do you need to enhance your social media drive? Procuring recommendations from experts such as your brokers will help you identify the right strategies that will improve your chances of closing the deal.
Selling your restaurant or café will most likely be anything but easy but success is not at all impossible. Getting the right assistance and implementing the best approach will dramatically improve your chances, get you the most benefits and make the entire process a relative breeze.
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