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.
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.