How to Sell a Café – Financial Preparation

How to Sell a Café – Financial Preparation

How to Sell a Café – Financial Preparation

 

One of best things that you can do in order to prepare your café for sale is to have your financials prepared and ready to provide to qualified buyers.

 

Having your financials prepared basically means having up to date information that proves the amount of sales, expenses and profitability of the business.

 

When your financial information is prepared and ready to go it helps with the business sale in several different ways but, most importantly it will save you, the business owner a great amount of time.

 

In worst cases if this information is not properly prepared (and accurate) then it can cause a sale to stall and even fall through.

 

If you have worked hard to market and advertise your café and you have generated some interest you need to make sure you keep those people interested and give them very little reason to pull out or try and negotiate the price downwards.

 

Selling a cafe has a lot to do with reducing risk in the eyes of the buyer and if you do not have things like your financials in order the alarm bells will start ringing.
Many of the people that consider buying your café may not have any experience in the industry and may not be aware of how many café businesses operate (I think you know what I am talking about here).

 

Your job is to demonstrate the income that they can expect from the business and, if your BAS statements and financial accounts can’t prove this 100% then you need to think strategically.

 

One way that you can get around this is to use a tracking sheet in an application like Excel. This kind of spreadsheet can be completed in a matter of minutes each day and can be a very useful during the sale process.

 

How to Sell A Cafe - Financial Prearation

 

One of the key things to remember with this system is that you need to back up the information entered onto the spreadsheet. For example it’s no good just putting down that you took $1200 on the 14th of August unless you have kept a Z report or a POS record which verifies that.

 

The same applies with your invoices and staff payments, keep a separate record and make sure that everything matches with your spreadsheet.
I know what you are thinking and can almost hear the groans but trust me, spending a few minutes each day entering this information and filing the matching paperwork will pay dividends.

This simple system will help you to clearly demonstrate the value of your business and at the same time speed up the sale process by giving buyers less things to ask questions about.
The earlier you can start this the better, the more information that you can give to buyers like this the easier it’s going to be to get them over the line.

 

When to give out this information.

Naturally this information is very confidential and should not be shared with anyone unless you are confident that they are serious.

 

With my brokerage clients I take a goodwill deposit of 5% before this kind of information is shared. After this deposit is paid we grant the buyer a two week period of exclusivity where they can carry out their due diligence.

 

If you are selling on your own then you can still get a signed confidentiality agreement, (something that we cover in out Six Weeks to Sale program) which helps to ensure that any information provided is treated with confidentiality.

 

If you have any objection from somebody about signing a simple agreement like this then that is normally a sign that they are not a serious buyer.

 

When you get to the point that you consider sharing this information you will probably have had several interactions with the person interested and you should feel comfortable providing all the details required for them to confirm the figures you have quoted in the marketing of the business.

 

 

I hope this has given you a couple of ideas about how you can sell your café with more ease, it does not have to be a long or stressful process you just need to be prepared.

 

If you would like a copy of the spreadsheet I mentioned above just type “Spreadsheet” in the comments below and I will send you a copy.

Exit Planning For Cafe Owners - Lease Considerations

Exit Planning For Cafe Owners – Lease Considerations

 

 

 

The Sweet Spot – Timing the Sale of Your Business

 

This post marks the first in a new series discussing the ways in which you can add value to your cafe and maximise the return when you sell. This article discusses what an important part of the valuation process the lease is and, how it can affect how saleable your cafe is when you go to market.

 

 

All retail food businesses have a built-in clock. For some this clock sets the time frame for business growth and for others it is a ticking time-bomb. The realities of the retail food game are harsh. A profitable business on a poor lease, is a still a poor business. In this article, we explore the relationship between the length of the lease and the sale of your business.

 

There are two closely related moving parts. The first, is the impact your lease has on the value of your business and secondly, the sweet spot – when your business stands the best chance of achieving maximum sale price relative to the time left on the clock.

 

So we start with a simple reality.

A profitable business with a long lease can be sold for more than a profitable business with a short lease.

No two businesses are alike, so what value drivers are common to most successful business sales?

Answer: Profit and lease years remaining.

We will explore profitability later on in this series, here the focus is on lease years remaining, and more particularly the valuation multiples that apply to food businesses.

 

If you have come along to one of my workshops, or heard me talk at trade shows or industry events, you would know that establishing the correct profit (earnings) multiple for your business is crucial in planning the sale.

 

There are a host of value drivers and detractors that depend on the subjective circumstances of your business. The days, hours and intensity of operation, the relative skill (or not) required to produce menu items, the location and demographic are all examples of the factors you must carefully consider and balance.

 

Say, for example, having found that balance with your business advisors and accountants you arrive at a profit multiple of 2.6. That means you could expect a buyer to pay 2.6 years’ worth of profit for your business.

How many lease years need to be left on the clock to justify the buyer paying you 2.6 years of profit upfront ?

If you were buying would you pay 2.6 years of profit with 2, 4 or 6 years remaining ?

What if the landlord refuses to extend the lease ?

 

Take-Aways

This brings home the plain truth – you must plan to sell your business before you sign the lease. Opt for a lease with a baked-in exit strategy that coincides with sales growth, projected profitability and the multiple you need to make the risk worth it. Yes, you need to value your business before you build it.

Knowing the multiple means you can make strong decisions early, rejecting sites, offers and landlords that drive the multiple down. Remember apart from a bunch of second hand equipment, all you really have to sell is the opportunity to make profit from a site for a fixed number of years. The more years left on the clock, the higher the price.

 

© Peter Panagiotopoulos 2017 @cafelawyer

 

Exit Planning For Cafe Owners – Lease Considerations

 

 

Peter Panagiotopoulos of CRAFT Legal is a leading lease and business sale negotiator who has protected the rights of food and beverage retailers for over two decades.

 

Known within the industry as the cafelawyer®, Peter has personally choreographed the sale of hundreds of small businesses and has dedicated his legal career to giving businesses the tools and confidence to make the right business-building decisions.

 

 

Mobile              0414 257 298

 

Web                 www.craftlegal.com.au

 

Twitter              @cafelawyer https://twitter.com/cafelawyer

 

Blog                 https://cafelawyer.wordpress.com/

 

 

 

 

 

 

 

Which are the Best Websites for Selling a Business?

Which are the Best Websites for Selling a Business?

 

 

 

Which are the Best Websites for Selling a Business?

 

I quite often get asked “Which are the Best Websites for Selling a Business?” In this video I compare four of the top websites that I use to list cafes for sale. I will show you the cost comparison as well as how many views and enquiries each website generated.

The sites compared are:

 

SEEK Business                      https://www.seekbusiness.com.au/

Business For Sale                 https://www.businessforsale.com.au/

Business2Sell                        https://www.business2sell.com.au/

Business For Sale.com        http://australia.businessesforsale.com/

 

 

Whilst the results are from one of the quieter months of the year (June) the business that we will compare was added to each of the websites at the same time so it was a level playing field.

 

If you are considering selling your business yourself then you might only be looking to list your business on one or maybe two websites. With limited exposure it is important that you get the best return on your investment and generate serious enquiries as soon as possible.

 

There are also a couple of tips about writing you advert to make sure you cut down on the amount of phone calls and emails that you get and some suggestions about how to deal with buyer inquiries.

 

Hopefully the video will help you decide which are the best websites for selling a business and you can advertise your business and get a quick result.

 

If you would like a PDF of these slides then please just click here or  post your request in the comments below and I will send a copy out to you.

 

You may also want to look through the transcription below the video.

 

Best Websites to sell a Business from Paul Leach on Vimeo.

 

 

Video Transcription

 

This short video is about where it’s going to be the best place for you to advertise your particular business for sale.

 

When you’re looking at a listing on the main Business For Sale Websites the cost can be quite high so it’s really important that you work out for your business where you think you can get the best return on that investment.

 

You don’t want to just be throwing money left right and centre to try and generate inquiries and you also you want to make sure that you generate decent inquiries.

 

In this video we’re going to walk you through can to compare costs for that for the top websites that I use.

 

I am going to also have a look at the key things that you should be looking for which are going to be things like how much is the ad going to cost overall how many people are likely to see the ads.

 

I will also look and compare results from one listing which I have got on four different websites you can see how many views that ads got and then how many inquiries you are likely to get.

 

Its no good lots of people seeing you ad if they are not really serious buyers. We will look through one listing has been on the internet for about four or five weeks now and we’ll compare the metrics for that.

 

So the websites that we’re going to talk about today are going to be

 

Australian business for sale

SEEK Business

Businesses for sale.com

Business2sell.com

 

We’ll also have a quick look at my Website as well just give you a sort of benchmark figure.

 

If you’ve been doing a bit of research I’m sure you would have seen most of these sites.

 

These are four of the websites that I use consistently.

 

So the first one as mentioned is www.australianbusinessforsale.com.au   I have always had pretty good results with this site to be honest it looks a little dated when you compare it to SEEK but actually the functionality is pretty good.

 

 

It’s really easy to add a business on here, a very straightforward process for listing which again the important thing to think about are probably one of my favourite websites.

 

So on this one you can have a look at the pricing table here. Now I’ve never used it to be honest I have never used any of this looking at this and I’ve done the same for each website based on a three month listing.

 

You could obviously get a cheaper price if you have you list for longer but to be honest if your business is well prepared and if it’s priced correctly you shouldn’t be needing to list it for longer than three months.

 

 

 

 

So this one here you can see $190 for the three months plus GST bring it down to about $63.33 per month.

This is actually pretty reasonable I think that’s not too bad at all.

 

Next we move on to SEEK. Now you can see that seek again a very well-known site and very user friendly.

 

 

This website is so easy for buyers to search here for the type of business they’re looking for. It does get a high volume of traffic but I guess because of that sort of status that it’s got and where it’s positioned in the market is one of the most expensive so a three month listing on here.

 

 

You’re looking at $645 which breaks down to $215 a month so definitely at the top end and I think probably one of the most expensive websites for this kind of listing that that’s out there.

 

As you will see in a slide later on actually that the quality of leads that you get from this site are very good but it’s a premium price there’s no doubt about that.

 

As with all of the websites you can get a cheaper price if you go for a longer period but we don’t really want to be looking at that.

 

So for this purpose we’ll base $215 per month for SEEK.

 

Moving on to www.businessesforsale.com

 

 

Again a very well-known very popular site. These guys have got sites all around the world and this is obviously the Australian version here.

A good website and looking at that again is very similar to the first website.

 

$200 a month so $66 plus GST per month. Pretty reasonable to be honest.

 

 

And finally we’ll look at www.business2sell.com.au

 

 

This site here actually searches pretty well for a lot of key words in the hospitality industry and what I like about this site is that some of my listings that I’ve put up there literally only four or five weeks ago they’re already ranking pretty well organically. So it’s bringing more traffic to my website as well which is obviously useful.

 

As you can see fro the pricing above www.business2sell.com.au   is the second most expensive at $127 plus GST per month.

So again, a reasonable amount to be to be looking at spending.

 

 

 

Now we’ll have a look through now some of the results that I’ve got for one listing recently

 

You can see that this business was listed on these four websites pretty much within the space of four or five days so it’s been on the site for the same amount of time.

 

I won’t go through on this slide here ordered results individually but you can see they’re all kind of similar in the way they break down shows you how many how many views you’ve got how many inquiries you’ve got and so on.

 

Bearing in mind it’s the middle of winter (It’s currently July) the views and inquiries are lower than you should expect normally.

 

Even though it’s a quieter time of year for this purpose the playing field is level. The business has been listed on all of  these sites for the same length of time so you can see down here the amount of views that it’s had from each website.

 

Here is a Summary of the results

 

 

 

 

Here are a couple of other things that I do that you could you could look at doing yourself as well for advertising your business.

 

So firstly I will use Facebook ads, this is probably more geared for my kind of business I guess where I’m able to target people based on pages that I’ve looked at on my website, if they like some of my competitors Facebook pages and other actions that they’ve taken on my Facebook page and so on.

 

The other thing that you could do on Facebook is boosted posts. I use these quite a lot. You can see here some of the results and this is on all of these this spend is around $40 to $50.

You can see it’s possible to get your ads in front of quite a lot of people.

 

These are all targeted by interests. I was targeting people that had an interest of a cafe or a coffee shop and they lived near where these businesses are targeted.

 

 

Well hopefully that has been a little bit of help as I said if you’d like a copy of the slides so that you can reference all of those things that we’ve talked about Please feel free just to put a comment below and add your contact information

 

If you have any other questions or need any help please feel free to contact me on 0415 80 13 13 or Contact Me Here

 

 

 

Refurbished Cafe Lower North Shore

Refurbished Cafe Lower North Shore

REF: YTE10225

Price $249,000

 

This well known Café on The Lower North Shore has been established for more than 30 years and has been with the current owners since 2015. There are approx. 40 seats outside and 35 inside.

Coffee sales are strong with current sales at 60kg+ per week and the café also serves breakfasts, a range of sandwiches, burgers, steaks and desserts. The premises is fully licensed and also has a wide range of cold drinks such as milkshakes, frappes and smoothies.

The cafe has recently undergone a major refurbishment and there is nothing left for a new owner to do.

Due to family circumstances the current owners are no longer able to work in the business, this has resulted in the opening hours having to be shortened and the business is now being run under full management.

The current turnover of $19,000 per week was more than $30,000 prior to the evening hours being cut. The demand is still there for the business to be open in the evening and an owner/operator that was able to re instate these hours could significantly increase the turnover.

 

Lease
The 5×5 year lease commenced in March 2015. – CPI. increases – A 3 month bond is required

Staff
11 Staff in total including a full time manager, two chefs, two kitchen hands and waitstaff.

Trading Hours
Mon – Wed 7:30am to 6:30pm

 

Thur 7:30am to 7pm

 

Fri 7:30am to 9:30pm

 

Sat 8:00am to 9:30pm

 

Sun 8:00am to 4pm

 

 

Premises
45 square metres. – Full commercial kitchen. Outdoor seating area.

 

Opportunity

The food cost percentage and wages are currently higher than they should be, an experienced operator could reduce both and greatly improve profits.

Reopen  in the evenings.

 

 

For further information please register here

 

 

If you are already registered and have signed and returned a confidentiality agreement then please feel free to contact me anytime on
0415 80 13 13
Eastern Suburbs Cafe Bakery for Sale - $625,000 + SAV

Eastern Suburbs Cafe Bakery for Sale – $625,000 + SAV

 

 

This  Cafe Bakery was established by the current owner three years ago and the shop has been professionally fitted at a cost of over $650K.

The commercial kitchen has a full range of high specification equipment and is currently used to produce and serve breakfast and lunch.
The majority of the bakery equipment is Italian made and is used minimally in relation to its capacity. This includes a rack oven, deck oven, 50kg spiral mixer and custom made cool room and freezer storage.

The shop is in a popular location for coffee and the sales are around 45kg per week. The current owner does not work in the shop and these sales could be improved by an owner operator being onsite.
The current staff consist of a Pastry Chef, Pastry Cook, a kitchenhand and five casuals.

An owner with experience in baking and pastry cooking could reduce wage costs significantly and the shop would also benefit from having more management presence.

The bread currently made onsite is only sold in the shop, the new owner would have the opportunity to introduce a wholesale service once production is brought back into this shop.

 

BUSINESS HIGHLIGHTS

High Quality Shop Fit Out ($650K)
Full commercial kitchen
High Spec Bakery Equipment
Custom built walk in cool room

Full Stainless steel custom made freezers
Busy location Average Sales $21k per week
45kg Coffee Sales
Good Lease with 7 Years remaining
Well trained staff
Full three week training period offered to new owner
Recipes for award winning products included
Potential to add wholesale side to the business

 

For more information please complete & return our Confidentiality Agreement and Call Paul Leach on 0415 80 13 13

 

 

Coffee shops for sale Sydney

Coffee shops for sale Sydney

GSE Business Consultants specialise in selling cafes and we have many Coffee shops for sale in Sydney.

 

You will find a selection of some of these businesses on this page but we always have others that are not listed on the internet. If you you like details of all of the current coffee shop listings that we have then register as a buyer with us (click the buyers link above)

 

and complete the online confidentiality agreement and we will send you out some detailed information about opportunities available.

 

As well as Coffee shops for sale in Sydney we also work with cafes, restaurants and takeaways, browse all of our cafes for sale.

 

If you have a Coffee shop for sale  or if you are considering selling we would love to help you, find out more about our services.

 

 

Coffee shops for sale Sydney