Starting a small business is definitely one of the hardest things you will ever do. However this experience is nothing when compared to selling your business.
If you are eventually going to sell your business you must make it attractive to prospective purchasers from the very start.
Who would want to buy your restaurant or cafe?
There are many different reasons why people purchase a restaurant but it’s probably safe to assume that making an income is high on the list. A profitable business will definitely attract more buyers and bring a higher price than a struggling business.
Growth and profit potential as well as the value of the assets may also be important, however as a rule of thumb, the more profitable an existing business is, the more it is worth to potential buyers.
Another point to be considered is how much the existing business will suffer without the current owners. Potential buyers will recognise a well run business. By taking the time to create staff, operating and kitchen systems you are giving your business the best chance.
If your business depends on you for its daily survival, then when you want or need to sell you really are only selling a job, with overheads and large capital outlays. Doesn’t sound that attractive does it!
Because of this many restaurant and cafes fail to sell for anywhere near their proper market value, or at least what the current owner wants.
Building a business that’s not dependent on you
Systems allow your business to run automatically whether you are there or not. People definitely notice a well run operation, so even if you are forced to sell, the business with all its systems in place, still has the potential to run smoothly. You will probably get a better price for it as well.
Having the right team is also an important part of building a business that doesn't depend on you to survive.
When my wife and I relocated to Santa Monica, California in 2009 to adopt our son, I ran my business, Sydney Commercial Kitchens, remotely for over 2 years. And the second year that we were away was, at that time, the most profitable year we had ever had. This highlights the fact that we have the right team and systems in place.
Having a set of manuals outlining all the systems that make your business what it is means that someone else could take over and also run your business successfully.
A last word... When we sold our restaurant we initially approached a business broker who gave us a valuation based on his experience. Finally we placed an advertisement in the paper ourselves, sold it to the first caller and achieved a sale price over double what the broker had valued it at. Plus they took over existing equipment leases. Choose your advisors carefully!