I want to sell my pub-restaurant in six to nine months' time. What can I do to maximise the price and the chance of selling?
Carl May, Catered4
First, you are thinking in advance, which is half the battle. There are two lines of attack you should take now: financial and physical.
Financially, you should use the next six to nine months to ensure that your accounts are as profitable as possible. Ask yourself some money questions. Do I need to spend that money? And if so, will it bring in a short-term reward?
One of the major contributing factors to a would-be purchaser is the profitability of a property. Not only do they want to see a current trading profit, but all money lenders will need to see past levels of profit before parting with their money.
Try to put an extra squeeze on your overheads, such as fuel and staffing, and turn your stock into turnover. Look at introducing high-profit products on both wet and dry sides of your business.
By squeezing food and drink cost prices, gross profit margins will increase. Look at your selling prices. Are you due to increase them? If so, do it now.
Where possible, try to keep the news of your sale discreet. It will adversely affect turnover.
On the physical side, many quick changes can be made. De-clutter and attend to those little jobs that will help enhance the overall ambience of the property. A lick of paint, both inside and out, will pay dividends, and well-maintained grounds are a must.
Many would-be sellers overlook the importance of the private accommodation. It is essential that this is both well-decorated and kept clean and tidy. Prospective buyers need to be able to see themselves living in that space, just as much as running the business downstairs.
When the day comes to sell, be approachable and honest, and show the time and courtesy you would want to receive.
Chris Lane, Kingston Smith
It is essential that you have a plan of action in place and consider who is going to buy your business. Putting yourself in your prospective buyer's shoes and understanding what interests them will enable you to achieve a better sale price for your business.
The time scale you have highlighted is short, and therefore you should start right away making your business as attractive as possible for potential purchasers. It is the same principle as tidying up your garden before you sell your house.
You need to present your business in the best possible light. This means dealing with any outstanding problems that you may have, and getting these resolved.
A buyer will be looking for confidence in the underlying profit in your business. A good track record is therefore a must to maximise the selling price, and this needs to continue until you sell. Delay any non-essential expenditure where possible to maximise the net profit of the business.
A buyer will also be looking closely at your existing staff to evaluate how they fit into the business. You will need to talk with any key employees and explain your plans to them.
With any sale, you will need to consider any liabilities that you cannot escape - for example, a long lease on your premises. You will also need to consider with your professional advisers the tax implications of a sale. Discuss your plans with them so they can advise on the best deal structure to minimise the potential tax liability.
Robert Curtis, Davis Coffer Lyons
Generally, the market remains extremely buoyant, driven by increased demand from aggressively expanding restaurateurs and a short supply of good sites.
Taking into account your time frame, do bear in mind that a purchaser will want to be in place to capitalise on increased trade during busy times of the year, particularly if you have an outside area that fills up during the summer. And you should ideally allow three to six months for marketing and the legal process.
There are two conventional avenues to consider if your property is leasehold: either an assignment of the lease or a company sale.
The latter is really only an option if you are selling a profitable business. A purchaser will be paying for the hard work you have put into making your concept a success, and perhaps the potential to expand the business. In this situation, the best advice would be to continue to drive successful trade while keeping your operating costs under tight control.
More commonly, a seller just places their leasehold interest on the market. Essentially, all that is being marketed is the right to assign a lease on a property, with the benefits of the fixtures and fittings.
Whether it is an independent or a corporate purchaser, they will inevitably want to put their own stamp on the restaurant, either completely refitting or just cosmetically changing the appearance of the property. Therefore, unless your restaurant is in a poor state of repair, I would suggest refraining from spending funds which will not add to its ultimate value. If the restaurant is well located, it will attract interest and a premium at market level.