Learn how to safely transfer business assets when offering owner financing to sell your Atlanta bar.
Selling your Atlanta bar for cash is the best way to transfer your business assets to the buyer and there is very little risk associated with the transaction. In fact, most of the risk is shifted to the buyer who pays cash up front when the note is signed. Selling your Atlanta bar for cash is ideal however, in today’s economy you may find yourself offering owner financing. If you choose to work with owner financing there are some precautions that you should take to protect yourself and your business assets.
Last year the lending market collapsed due to the poor economy which coerced real estate buyers and investors to seek an alternative for financing property purchases. Lending markets have grown squeamish about bar financing since this type of property is valued mostly for the revenue it produces instead of the business assets such as inventory and equipment. As a result, buyers and sellers of Atlanta bars are turning to owner financing as an alternative to the aggravation of trying to secure financing from a conventional lender. If you are a seller of an Atlanta bar you may find yourself in an owner financing deal if you want to sell your business. Before you jump in with both feet and offer a buyer the option of owner financing here are a few things to be aware of:
Number One – Never finance more than you can afford to lose if the buyer defaults on the note. It may seem like this is not worth mentioning however there are many Atlanta bar sellers that will inflate their financial information so they can create a better lifestyle for themselves. If the buyer defaults on the payments the seller can end up in extreme financial difficulty.
Number Two – Hire an attorney to work out the details that will ensure you are protected in the event of payment default. Successful owner financing requires working out all of the details including the procedure that will be followed in the event of default. This includes details of the repossession spelled out in detail and completely defined so both parties understand and agree to the terms. In addition to these details, your attorney should work out the legal details for placing a lien on the equipment so that you are assured that your assets are protected if the buyer fails to meet the payments according to the terms of the note.
There are a variety of methods you can use to provide security and protection if the buyer fails to make the payments on the note. The note can contain terms that allow you to place a lien on your business equipment to ensure that the buyer does not dispose of it during the terms of the agreement. Additionally, it is a good idea to seek a personal guarantee from the buyer. Lastly, you should seek some type of security from the owner’s assets such as a home, brokerage account, rental property or anything else that provides you with value and security if the buyer defaults on the note. Collecting on the secured property can be tedious and costly so you should seek a qualified buyer from the beginning that has the experience and expertise to keep the business running at a profit.
Number Three – Do a background check on the buyer before offering owner financing. This includes pulling a credit report, seeking professional references, requesting a resume, and any other data that will verify the credibility of the buyer. Remember that it is worth it to do your homework in the beginning to avoid hassles and headaches at a later date.
Lastly, when you offer owner financing picture the worst case scenario that you can possibly think of that can happen with the new owner of your bar. Estimate how much it will cost you if you have repair and remodel your bar to open it for business in the event you have to repossess your property. Once you have your estimate make sure the down payment is enough to cover the costs if you have to take back your bar.
If you keep these items in mind when using owner financing to sell your Atlanta bar you will be assured piece of mind as well as a secure sale that is headache-free.
To learn more about buying or leasing Atlanta restaurants CLICK HERE
Showing posts with label sell my atlanta restaurant. Show all posts
Showing posts with label sell my atlanta restaurant. Show all posts
Wednesday, May 19, 2010
Selling an Atlanta Restaurant: Why You Should Not Try to Do This on Your Own
Three good reasons why you should not try to sell your Atlanta restaurant on your own.
Number One – Sentimental ties to your restaurant. Your restaurant is most likely something you have built from scratch and you have watched it grow and prosper and take care of your family’s needs over the years. This means your restaurant is your baby and now that you have made the decision to sell there will be moments of regret and emotional attachments even if you are selling it for all the right reasons.
When you work with a potential buyer they will be looking to find fault with your restaurant to justify their offer price. So if they say something like “I tried the spaghetti and the sauce has too much salt,” you will most likely be offended if this is a family recipe that has been passed down for generations. If you sell through a restaurant broker they will be focused on representing the transaction and getting the deal done minus the emotions. This scenario is a lot different than if you try to sell your restaurant on your own.
Number Two – Everyone is good at something and your talent is best used running a restaurant. A professional restaurant broker’s talent lies in selling the restaurant. You have taken your dream and managed to make it grow and prosper and you are likely an excellent chef or you learned the family recipes at your grandmother’s knee. On the average, most restaurant owners are special individuals that enjoy serving and entertaining people. They enjoy the “hands on” part of running a business and solving problems when the bartender and the dishwasher both call in sick. Typically restaurant owners are not interested in the mindless paperwork and accounting which is another necessary element for running a successful restaurant.
When you are selling your restaurant the buyer is going to be focused on the accounting details and bookkeeping records to help them with making an offer. You should ask yourself if you can manage your restaurant while simultaneously talking to the buyer. Remember that the buyer could care less whether or not they show up during your busiest time such as between noon and 6 pm on a Saturday. As a result, you will find yourself doing more of what you are less good at and less of what you are very good at which is running the restaurant.
The business will suffer in your absence and the transaction will fail due to your lack of brokerage skills. Instead you should turn the sale over to a professional restaurant broker that knows his job while you concentrate on what you do best and maintain the profits.
Number Three – Just because you received an offer doesn’t mean your restaurant is sold. Reaching an offer that you both agree on is the easiest part of a transaction and is only the beginning of the process. Buyers and sellers that agree on a price are not difficult to put together. The tough part is holding the transaction together until closing which is where a restaurant broker can be of tremendous help with seeing the deal through to completion.
The restaurant broker’s work begins once the buyer and seller agree on an offer. Shortly after, the buyer will begin to put every element of the transaction under a microscope when the reality begins to hit that he is in the deal for the long haul. At this point there are numerous opportunities for the deal to collapse post contract which is why it is necessary to have a restaurant broker working with you.
The restaurant broker is working at reassuring the buyer that the unpaid lien is not a disaster and can be resolved at closing. He or she is also helping the seller locate two year old tax returns with a stamp on them from the Internal Revenue Service and assisting the seller with the sales tax clearance letter from the state.
On the other side, the broker is working with the buyer when he discovers there is a list of items on the inspection results that need to be fixed and with the seller when he discovers he is stuck in the liquor license during the transition period. In another scenario, the broker is working with the attorney for the buyer who refuses to close without the piece of paper and then explaining to the seller where he can obtain the piece of paper required by the buyer’s attorney. Meanwhile the broker is getting the heat from both sides while keeping his cool so the deal will go all the way to the closing table.
No wonder restaurant brokers frequently hear “This deal never would have happened without you.” Brokers are equipped with the skills that are necessary to prevent the deal from getting off track and bringing it back to fruition when there are disagreements. Without the restaurant broker, you have less than a 1 in 20 chance of the deal making it all the way to the closing table which is why you really need a restaurant broker to sell your restaurant.
To learn more about buying or leasing Atlanta restaurants CLICK HERE
Number One – Sentimental ties to your restaurant. Your restaurant is most likely something you have built from scratch and you have watched it grow and prosper and take care of your family’s needs over the years. This means your restaurant is your baby and now that you have made the decision to sell there will be moments of regret and emotional attachments even if you are selling it for all the right reasons.
When you work with a potential buyer they will be looking to find fault with your restaurant to justify their offer price. So if they say something like “I tried the spaghetti and the sauce has too much salt,” you will most likely be offended if this is a family recipe that has been passed down for generations. If you sell through a restaurant broker they will be focused on representing the transaction and getting the deal done minus the emotions. This scenario is a lot different than if you try to sell your restaurant on your own.
Number Two – Everyone is good at something and your talent is best used running a restaurant. A professional restaurant broker’s talent lies in selling the restaurant. You have taken your dream and managed to make it grow and prosper and you are likely an excellent chef or you learned the family recipes at your grandmother’s knee. On the average, most restaurant owners are special individuals that enjoy serving and entertaining people. They enjoy the “hands on” part of running a business and solving problems when the bartender and the dishwasher both call in sick. Typically restaurant owners are not interested in the mindless paperwork and accounting which is another necessary element for running a successful restaurant.
When you are selling your restaurant the buyer is going to be focused on the accounting details and bookkeeping records to help them with making an offer. You should ask yourself if you can manage your restaurant while simultaneously talking to the buyer. Remember that the buyer could care less whether or not they show up during your busiest time such as between noon and 6 pm on a Saturday. As a result, you will find yourself doing more of what you are less good at and less of what you are very good at which is running the restaurant.
The business will suffer in your absence and the transaction will fail due to your lack of brokerage skills. Instead you should turn the sale over to a professional restaurant broker that knows his job while you concentrate on what you do best and maintain the profits.
Number Three – Just because you received an offer doesn’t mean your restaurant is sold. Reaching an offer that you both agree on is the easiest part of a transaction and is only the beginning of the process. Buyers and sellers that agree on a price are not difficult to put together. The tough part is holding the transaction together until closing which is where a restaurant broker can be of tremendous help with seeing the deal through to completion.
The restaurant broker’s work begins once the buyer and seller agree on an offer. Shortly after, the buyer will begin to put every element of the transaction under a microscope when the reality begins to hit that he is in the deal for the long haul. At this point there are numerous opportunities for the deal to collapse post contract which is why it is necessary to have a restaurant broker working with you.
The restaurant broker is working at reassuring the buyer that the unpaid lien is not a disaster and can be resolved at closing. He or she is also helping the seller locate two year old tax returns with a stamp on them from the Internal Revenue Service and assisting the seller with the sales tax clearance letter from the state.
On the other side, the broker is working with the buyer when he discovers there is a list of items on the inspection results that need to be fixed and with the seller when he discovers he is stuck in the liquor license during the transition period. In another scenario, the broker is working with the attorney for the buyer who refuses to close without the piece of paper and then explaining to the seller where he can obtain the piece of paper required by the buyer’s attorney. Meanwhile the broker is getting the heat from both sides while keeping his cool so the deal will go all the way to the closing table.
No wonder restaurant brokers frequently hear “This deal never would have happened without you.” Brokers are equipped with the skills that are necessary to prevent the deal from getting off track and bringing it back to fruition when there are disagreements. Without the restaurant broker, you have less than a 1 in 20 chance of the deal making it all the way to the closing table which is why you really need a restaurant broker to sell your restaurant.
To learn more about buying or leasing Atlanta restaurants CLICK HERE
Buying an Atlanta Bar or Club – Reasons to Buy Instead of Build
Run the bar of your dreams tomorrow or start from the bottom and wait six months.
There is a surge in the numbers of Atlanta buyers that are seeking small businesses which offer all things “foodie” which is fueling the perfect explosion of Atlanta bar or club purchases. Many Atlanta buyers are choosing this option over starting a bar or pub from scratch and then waiting months to open which makes it very shaky proposition. Atlanta buyers want results right away and they are seeking Atlanta bars or clubs that have established a track record for success.
The facts show that many new Atlanta bars and clubs fail as a result of depleting the capital before the project is complete and six out of ten new bars fail by the end of the first three years in business. Additionally, most startup bars and pubs fail to plan for marketing expenses and costs incurred to help sustain the business during the first few years until it finally operates at a profit. These statistics certainly do not point in favor of aspiring bar owners that wish to build their own business from the bottom up.
When it comes to the Atlanta bar and pub market the saying, “if you build it, they will come” certainly does not apply to this market any more than it does for baseball. There is no formula for instant success with a startup bar in Atlanta so buying an existing bar makes perfect sense.
If you want to ensure your path to success as a bar owner, buy an established bar or pub in Atlanta. If you are an accomplished bartender but amateur contractor, deciding to tackle a bar project that requires you to build it from scratch means you will have a long road ahead of you. If you cannot use building tools as well as you can serve up a mean martini your project will be slow going and take a lot longer to accomplish.
It is quite common for buyers to try and save money by building their bar from the bottom up. We have many years of experience selling Atlanta bars and pubs and we come across this all the time. As the project unfolds the costs go up due to upgraded ideas that involve more costly additions and the result is soaring construction costs that exceed the amount of the original capital planned for the project. By purchasing an established pub or bar it is much cheaper to add a new space than to start your bar from scratch.
If you are business minded you know that time is money so buying an existing bar can have you open for business tomorrow. If you opt to build your bar or pub from scratch you may be waiting as long as nine months for the permits, construction, and finally the opening, when you could be serving your first cold beer tomorrow with a second generation business. Although the Atlanta liquor license does not transfer it is still easier than obtaining a liquor license on a brand new bar.
Regardless of whether or not the bar is struggling when you buy it, as long as it is established it will have a base of business that will provide you with a place to start. If your bar is built from scratch you are also starting from scratch with your customer base to build the initial sales dollar and then proceed from there with each dollar incrementally. Your first sales volume of $100,000 is always the most difficult milestone to achieve. With an established bar or pub you can take the existing sales to a new level with a marketing plan and other changes that will contribute to sales growth. This is a lot easier when compared to a pub or bar that you start from scratch. Regardless of your experience as a mix master and the number of people that you know, starting from zero with your sales is a very daunting task.
This is why you should find a professional Atlanta restaurant broker to help you find an established bar or pub that will allow you to hit the ground running as a new bar owner.
To learn more about buying or leasing Atlanta restaurants CLICK HERE
There is a surge in the numbers of Atlanta buyers that are seeking small businesses which offer all things “foodie” which is fueling the perfect explosion of Atlanta bar or club purchases. Many Atlanta buyers are choosing this option over starting a bar or pub from scratch and then waiting months to open which makes it very shaky proposition. Atlanta buyers want results right away and they are seeking Atlanta bars or clubs that have established a track record for success.
The facts show that many new Atlanta bars and clubs fail as a result of depleting the capital before the project is complete and six out of ten new bars fail by the end of the first three years in business. Additionally, most startup bars and pubs fail to plan for marketing expenses and costs incurred to help sustain the business during the first few years until it finally operates at a profit. These statistics certainly do not point in favor of aspiring bar owners that wish to build their own business from the bottom up.
When it comes to the Atlanta bar and pub market the saying, “if you build it, they will come” certainly does not apply to this market any more than it does for baseball. There is no formula for instant success with a startup bar in Atlanta so buying an existing bar makes perfect sense.
If you want to ensure your path to success as a bar owner, buy an established bar or pub in Atlanta. If you are an accomplished bartender but amateur contractor, deciding to tackle a bar project that requires you to build it from scratch means you will have a long road ahead of you. If you cannot use building tools as well as you can serve up a mean martini your project will be slow going and take a lot longer to accomplish.
It is quite common for buyers to try and save money by building their bar from the bottom up. We have many years of experience selling Atlanta bars and pubs and we come across this all the time. As the project unfolds the costs go up due to upgraded ideas that involve more costly additions and the result is soaring construction costs that exceed the amount of the original capital planned for the project. By purchasing an established pub or bar it is much cheaper to add a new space than to start your bar from scratch.
If you are business minded you know that time is money so buying an existing bar can have you open for business tomorrow. If you opt to build your bar or pub from scratch you may be waiting as long as nine months for the permits, construction, and finally the opening, when you could be serving your first cold beer tomorrow with a second generation business. Although the Atlanta liquor license does not transfer it is still easier than obtaining a liquor license on a brand new bar.
Regardless of whether or not the bar is struggling when you buy it, as long as it is established it will have a base of business that will provide you with a place to start. If your bar is built from scratch you are also starting from scratch with your customer base to build the initial sales dollar and then proceed from there with each dollar incrementally. Your first sales volume of $100,000 is always the most difficult milestone to achieve. With an established bar or pub you can take the existing sales to a new level with a marketing plan and other changes that will contribute to sales growth. This is a lot easier when compared to a pub or bar that you start from scratch. Regardless of your experience as a mix master and the number of people that you know, starting from zero with your sales is a very daunting task.
This is why you should find a professional Atlanta restaurant broker to help you find an established bar or pub that will allow you to hit the ground running as a new bar owner.
To learn more about buying or leasing Atlanta restaurants CLICK HERE
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