Every Owner Reaches a Point Where All They Want to Know is How do I Sell My Atlanta Restaurant?

The answer is easier than you would think if you call upon an expert Atlanta restaurant broker who can find all the earnings hidden in your financial statements.

Putting your Atlanta restaurant for sale in the market at the right price is the most critical element in getting it sold. Professionals, termed restaurant brokers, know how to put the correct value on your restaurant so it sells quickly and for the most money. Many restaurant owners, seeing other, overpriced listings on the market, want to list higher than the actual value. Customary models for pricing like the Income Valuation method eliminate this and ensure you’re priced in line with earnings. Inexperienced brokers or those without a financial background may attempt to price your restaurant based on assets or simply inquire what you want to sell the restaurant for. When that happens, quickly walk this broker to the door as his method for pricing is inexact at works and unqualified at best.

Certain key paperwork is required to perform an analysis and determine pricing. Be prepared to copy and hand over documents to substantiate your rent, Federal return and P&L (or profit and loss statement). Atlanta restaurant brokers that fail to request this information probably don’t have the industry understanding and skill to price the business. The fiscal image of your Atlanta restaurant for sale is far more important than the concept or menu when it comes to getting is sold.

Expect detailed questions on your own 1099 or W-2 income as well as any payments to family or your spouse. Insurance payments on your P&L should be quested to determine if the business is actually benefiting you as the owner by making these payments. Any automobile costs that show up on your P&L should be challenged by the restaurant broker to understand if this can be included in add backs. The same is true for telephone expense (cell phones) or other personal items.

Some expenses are deemed as non-recurring since they are the result of a one-time incident. This could include things like legal expenses for a lawsuit or renovations. Remember, any item that can be proven and would not result in a similar expense for the subsequent owner can be considered in add-backs. If your son’s bar mitzvah was hosted at your restaurant and incurred an extra $15,000 in food costs that can be verified, it may count. Your broker should ask thorough and thoughtful questions to understand your financial statements.

Be prepared to produce and review your depreciation and amortization schedules since these are customer add backs as well as review the travel account since owners often book vacations that the company pays for. If the donations on your tax returns are to your temple and that will change for the new owner, it’s also added back. Sponsorship of the local little league which results in sales will not add back.

Lastly, expect to be questioned about anything that’s not directly reflected through the POS system or on the tax returns. This might include pool table income, lottery income or other categories. If there are receipts to document this, it’s an allowable add back.

A knowledgeable restaurant broker in a major market like Atlanta will be able to explain with confidence the value of the restaurant and his basis for arriving at this value. Your answers to key questions like these help to establish maximum that can be proven to a buyer for your Atlanta restaurant for sale. A broker that fails to ask questions or lists at your pricing will ultimately damage the listing. Overexposing the listing without the correct pricing is a recipe to sit on the market with no offers until you’re ultimately forced into a lower price than you should accept. List your restaurant with an expert Atlanta restaurant broker to avoid this mistake.

Robin Gagnon is Vice President of We Sell Restaurants and wesellrestaurants.com, Atlanta’s premiere restaurant brokerage firm. Robin holds an MBA in finance and is a frequent writer on business sales, business valuation and restaurant finance.

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