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Don’t Wait Until It Is Too Late!

By in 2003 - Volume 5

In today’s active selling climate it is important to have your business positioned as favorably as possible. We are finding more frequently that sellers are not maximizing potential profit from their business’s sale because they have waited too long to put their restaurant on the market. Here is a list of things that need your consideration if you want to maximize the value of your business. These questions are generated from recent experiences with a significant number of our clients:

1. Are your fixtures and equipment in good working order and what equipment is included in the sale?

This seems to be a major issue with potential buyers as a significant part of the value of your business can be perceived from what equipment, furnishings, etc. are included with the sale.

2. Do you have enough time left on your lease, is it assumable and will the landlord cooperate with a new buyer?

The premises lease is one of the most important elements of the sale and is the major reason most deals fall apart. Ask your landlord up front what his posture is regarding this issue.

3. Are your financial records current and accurate?

Remember that a large part of the value of your business can be based on what your financials show.

4. Can your restaurant pass the special health inspection required at the sale of your business?

Please do not take a chance that your site won’t pass the inspection. Get a list of the requirements to know what the standards are before going into the sale so that corrective steps can be taken.

5. Do you keep your restaurant as clean as it should be?

First impressions are important with buyers.

6. Are there enough customers in your restaurant during meal periods so that potential buyers feel secure about buying your business?

I’ve had a couple of restaurants for sale for some time and the main reason we’re not getting offers is because there are very few customers in the restaurants. If this is your situation you may want to close the business before marketing the restaurant for sale.

7. Is the location still favorable?

Certain areas have been greatly impacted due to the current economic downturn and until these areas change buyers will not be interested in buying in these areas. We are finding that many sellers are waiting too long to answer the questions mentioned above and it becomes more difficult at the seller’s desired asking price to move a business that doesn’t keep up its standards. If you have waited too long, Restaurant Realty can assist you in the sale by advising you on what should be done to take remedial action in your specific situation. Restaurant Realty is specially adept in handling lease negotiations, and advising you regarding presenting financials in the best light possible.

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About The Author
Steven Zimmerman, CBI, M&AMI, CBB, FIBBA

Steve is the Founder, Principal Broker and Chief Executive Officer of Restaurant Realty Company. Steve has personally sold/leased over 1,000 restaurant, bar and/or nightclub businesses and many related commercial buildings totaling 2+ million square feet of commercial space, collaborated with over 2,000 clients and completed over 3,000 valuations since 1996.His real estate experience also includes sales, acquisitions, management and ownership of numerous properties throughout California including restaurants, hotels, apartment buildings, single family houses, an office building and a multi-use retail building. Steve is also the author of Restaurant Dealmaker – An Insider’s Trade Secrets for Buying a Restaurant, Bar or Club available on Amazon. Prior to starting Restaurant Realty Company Steve had over 20 years of restaurant experience and was President and Chief Executive officer of Zim’s Restaurants, which was one of the largest privately owned restaurant chains in the San Francisco Bay Area. READ FULL BIO | HIRE EXPERT WITNESS - LEARN MORE