Choosing The Right Business Broker When Selling Your Family Restaurant
If you're getting ready to sell your family restaurant, then it is important that you choose the right business broker for the process. It's wise to choose a business broker rather than try and sell it alone, but you still need to make sure you pick the right broker to do it.
Here are a few things to consider when choosing the right business broker.
Can They Produce An Attractive Teaser And Can They Market It To The Target Audience?
The teaser is a short document that is designed to whet the appetite of potential buyers. Teasers are written to be anonymous, and they don't mention the business by name. This will keep the fact that you are considering selling your restaurant a secret, so that your competitors don't try to steal your regular customers or potential investors.
The teaser should promote a profitable, highly-trafficked restaurant, without mentioning the location or name. You should look at previous teasers the broker has written and see if they can create intrigue. The teaser needs to have some flair. If it's all numbers, it will bore potential buyers.
It's also important that the broker knows who to send the teaser to. Ask them how they arrive at a list of potential buyers. Sending a teaser to a person looking to buy a liquor store or car dealership won't help you when it comes to selling your restaurant.
Will Your Restaurant Be Important?
It's also important to find out if your restaurant will be an important project. If the broker is used to handling multi-million dollar factory deals, then a modest restaurant might not warrant their full attention. So it's important to pick a broker that deals primarily with smaller family businesses that are within the same price range as your restaurant.
Can They Produce A Proper CIM?
Once you get potential buyers interested in the restaurant, they will want a detailed breakdown of the place. They want to know all about the finances, salaries, taxes, and other issues. The breakdown of this information is in a document known as a CIM (confidential information memorandum). This should be detailed and go back several years. It will be handed over and analyzed to see if the restaurant it profitable and worth the asking price.
Ask for sample CIM reports that the brokers have produced. They should be highly detailed, comprehensive, and have comparison data to other industries in the area.
Do They Know The Restaurant Business?
It is best to choose a broker that is knowledgeable about the restaurant business. They should know the particular aspects of the sector so they can effect a price negotiation. Things such as employee turnover, food supply logistics, and liquor licenses are all things that are important for the deal. A broker who is only familiar with dry cleaners, factories, or some other non-restaurant related business would not be as skilled at explaining these dynamic factors to the potential buyer.