How to keep a deal on track when meeting with an interested buyer.
When a buyer visits your Atlanta bar as a customer and decides they are interested they will request a meeting with you to see the rest of the operation. You will find that most buyers and brokers with experience will try to work around your business hours. Regardless if it is early in the morning or late at night, the buyer must understand that they need to be flexible with a business operation. You can also allow the buyer to view the backend operations posing as an insurance agent or other expected person that would visit the business during the daytime hours.
Here are a few ways that you can keep the deal on track during a buyer and seller meeting:
Never Meet Without the Broker
You never want to have a meeting with the buyer without the presence of your broker. This is because the broker can act as your mediator between your wanting to be helpful as possible to the buyer and the buyer wanting to obtain as many tidbits of information as he can. It is important to remember that not all buyers who inquire about your business will do so with the best intentions in mind. If they ask your broker a question and hear an answer that they don’t like chances are they will turn around and approach you with the same question in an effort to get the answer that they are seeking.
Don’t Share Copies of Financial Records
When you meet with the buyer it is okay to review and discuss financial information with a buyer that is pre-qualified however, never share copies of financial records with the buyer. This information should be channeled through your broker to protect your interests.
Don’t Offer a Business Card
Avoid sharing your business card with the buyer because this encourages him to contact you for a different answer than your broker provided which is similar to the scenario we described earlier. If the buyer requests your business card or tries to approach you with questions, always refer him to your broker for the information he needs. Tell your broker that the buyer has attempted to contact you so they can inform the buyer that he is violating the confidentiality agreement.
Be Personable and Brief
Try not to offer too much information during your meeting with the buyer. It is quite normal to be nervous which can cause you to reveal too much information about your business. You do not want to tell the buyer about situations that could raise issues such as telling him that you were once close to bankruptcy and you pulled out of it and built up the business to what it is today. Instead keep your answers brief, focused, and personable.
Don’t Be Late
Make sure you are on time for your meeting with the buyer. If you know your staff leaves at a certain time then schedule your meeting a few minutes or half hour after they leave so you are not held up by concerns or questions from your staff. Being late to the first meeting with the buyer may get the deal started off on the wrong foot.
Say Why You Are Selling
Always make sure you state your reason for selling. Although you may have shared the financial details, buyers always want to know the reason you are selling. When you are providing your reasons you should not reveal any personal information that is compelling you to complete a quick sale. First of all, this is none of the buyer’s business and secondly, it could cause you to lose your leverage with the buyer. So avoid telling the buyer that one of your business partners has cancer and only has six months to live.
It is okay to provide reasons such as disagreements among partners, retirement, lifestyle change, or taking care of your elderly parents in a distant location. These are all reasons that are understandable. Reasons that are not acceptable are age old reasons like you are pursuing other interests which doesn’t make any sense if you’re are currently running a profitable business. If you are involved with a franchise which isn’t doing well financially, it is okay to reveal this information. Chances are the buyer will already know by looking at your financial records.
Avoid Giving Advice
When it comes to legal advice or liquor license advice, avoid it at all costs and leave it to your broker to provide the legal resources and the contact information for the person handling your liquor license. While it is okay to tell the buyer the name of the person that handles your liquor license, avoid giving out any advice such as “The liquor license is no problem and here is all you do.”
Don’t Complain
If you have gotten hosed by your landlord or you realize you paid too much for the franchise this information does not concern the new buyer and may even raise issues that otherwise would not come up.
Don’t Provide Third Party Information
Avoid giving out your landlord or franchise contact information. Until your business is under contract the buyer has no legal right to this information. Furthermore, you do not want the buyer making contact with third parties that you have developed a relationship with. If the buyer happens to disrupt the relationships and then walk out on the deal you are left to clean up the mess. Instead send the buyer to your broker so they can control the third party contact.
To learn more about buying or leasing Atlanta restaurants CLICK HERE
Wednesday, May 19, 2010
The Basics of Selling a Restaurant in Atlanta
If you are looking to sell your Atlanta restaurant this advice can help make the process easy.
Advice Tip #1 – Establishing a trusting relationship with your restaurant broker is a must when you are selling an Atlanta restaurant. The relationship between you and your broker should be open and honest with a “no surprise” policy. It is important to make sure your restaurant broker is aware of every negative aspect of your business so you must pull out all of your dirty laundry and reveal any liability for the sale to be successful.
Although you may feel embarrassed to tell your broker about a recent liquor license citation, a tax lien in the hundreds of thousand dollars, back rent that is owed to the tune of thousands of dollars, or even a lawsuit that you are facing from an employee, the restaurant broker has seen it all before. Talk about these issues openly so your broker can help you resolve the issues and move the deal to the closing table. Remember that the broker is highly skilled at dealing with these issues and they are equipped to help you through them one by one. If you do not reveal these issues to the restaurant broker they cannot resolve a problem that they are not aware of.
Advice Tip #2 – Set the expectations ahead of time for how you want your broker to communicate with you. Ask the broker what forms of communication they use so you can get an idea of some of the methods they use. Some brokers use high tech systems that automatically notify you by email when there has been an inquiry about your listing. Our system does that. Other brokers will simply call you when someone responds to the listing. Then there are brokers who are poor communicators and will never contact you whenever there has been activity.
Restaurant brokers are very familiar with your type of industry so you can bet that they will never call you early in the morning since they know you work late or during the busiest times in your restaurant such as lunch and dinner on Saturdays. Your broker may never call you at your business to prevent opening up a confidentiality issue or they may call and simply leave their first name so you can return the call at your convenience. At any rate, clearly communicate to your broker how you want to be contacted as well as when and where you prefer contact.
Advice Tip #3 – Formalize a listing agreement contract with your restaurant broker. Define exactly what it is that you are selling and what parties are authorized to sign so the deal can move to the closing table. This will help you to avoid any misunderstanding from the get go and make the transaction process go a lot smoother.
If there is more than one partner involved with your business, obtain their consent and sign a corporate resolution to sell in advance of establishing the listing agreement. By following through with this process you are protecting yourself in the event that one partner is not available or the other one has a change of heart. Additionally, you should obtain a corporate seal on a document that confirms that all corporate partners have met and agreed to sell the business. Close the document by indicating a vote taken on this day and designate one partner who is authorized to sign in the absence of the other partners. It is important to note that this step is unnecessary if the partners are husband and wife.
Keep in mind that a business that involves more than one partner may be required by the restaurant broker to submit the resolution along with the signed listing agreement contract. A copy of these documents will be filed with the broker along with one included in the appendix.
Advice Tip #4 – The listing agreement must clearly define the identity of the person selling the business and should include the signature of the legal entity that owns the business assets for sale. This should also be the person whose name is on the liquor license and the legal name of the business being sold is to be included in the contract.
Advice Tip #5 – Make sure you confirm the standing of your corporation. You can do this by paying a visit to the website for the Secretary of State and verifying that all of the filings are up to date and the names of the officers on the state website are current. If you do not do this it will most likely cause problems at a later date when the contract is formulated.
If you want to sell your Atlanta restaurant minus a lot of hassles follow these advice tips and your sale will go off without a hitch.
To learn more about buying or leasing Atlanta restaurants CLICK HERE
Advice Tip #1 – Establishing a trusting relationship with your restaurant broker is a must when you are selling an Atlanta restaurant. The relationship between you and your broker should be open and honest with a “no surprise” policy. It is important to make sure your restaurant broker is aware of every negative aspect of your business so you must pull out all of your dirty laundry and reveal any liability for the sale to be successful.
Although you may feel embarrassed to tell your broker about a recent liquor license citation, a tax lien in the hundreds of thousand dollars, back rent that is owed to the tune of thousands of dollars, or even a lawsuit that you are facing from an employee, the restaurant broker has seen it all before. Talk about these issues openly so your broker can help you resolve the issues and move the deal to the closing table. Remember that the broker is highly skilled at dealing with these issues and they are equipped to help you through them one by one. If you do not reveal these issues to the restaurant broker they cannot resolve a problem that they are not aware of.
Advice Tip #2 – Set the expectations ahead of time for how you want your broker to communicate with you. Ask the broker what forms of communication they use so you can get an idea of some of the methods they use. Some brokers use high tech systems that automatically notify you by email when there has been an inquiry about your listing. Our system does that. Other brokers will simply call you when someone responds to the listing. Then there are brokers who are poor communicators and will never contact you whenever there has been activity.
Restaurant brokers are very familiar with your type of industry so you can bet that they will never call you early in the morning since they know you work late or during the busiest times in your restaurant such as lunch and dinner on Saturdays. Your broker may never call you at your business to prevent opening up a confidentiality issue or they may call and simply leave their first name so you can return the call at your convenience. At any rate, clearly communicate to your broker how you want to be contacted as well as when and where you prefer contact.
Advice Tip #3 – Formalize a listing agreement contract with your restaurant broker. Define exactly what it is that you are selling and what parties are authorized to sign so the deal can move to the closing table. This will help you to avoid any misunderstanding from the get go and make the transaction process go a lot smoother.
If there is more than one partner involved with your business, obtain their consent and sign a corporate resolution to sell in advance of establishing the listing agreement. By following through with this process you are protecting yourself in the event that one partner is not available or the other one has a change of heart. Additionally, you should obtain a corporate seal on a document that confirms that all corporate partners have met and agreed to sell the business. Close the document by indicating a vote taken on this day and designate one partner who is authorized to sign in the absence of the other partners. It is important to note that this step is unnecessary if the partners are husband and wife.
Keep in mind that a business that involves more than one partner may be required by the restaurant broker to submit the resolution along with the signed listing agreement contract. A copy of these documents will be filed with the broker along with one included in the appendix.
Advice Tip #4 – The listing agreement must clearly define the identity of the person selling the business and should include the signature of the legal entity that owns the business assets for sale. This should also be the person whose name is on the liquor license and the legal name of the business being sold is to be included in the contract.
Advice Tip #5 – Make sure you confirm the standing of your corporation. You can do this by paying a visit to the website for the Secretary of State and verifying that all of the filings are up to date and the names of the officers on the state website are current. If you do not do this it will most likely cause problems at a later date when the contract is formulated.
If you want to sell your Atlanta restaurant minus a lot of hassles follow these advice tips and your sale will go off without a hitch.
To learn more about buying or leasing Atlanta restaurants CLICK HERE
Why Owner Financing is Changing the Climate When Selling Your Atlanta Bar
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
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
What Atlanta Restaurant Franchise Buyers Should Know About the Franchise Disclosure Document
Before you buy a restaurant franchise learn about the items that are not disclosed in a Franchise Disclosure Document.
When buying a restaurant franchise in Atlanta there is information about the franchise that is disclosed by law and in accordance with the Federal Trade Commission regulations. The information is available in the Franchise Disclosure Document and can be helpful when you are looking to invest however, there is information that does not have to be disclosed by law but is crucial to your investment in a restaurant franchise. Here are five essential items that are not disclosed in a Franchise Disclosure Document:
1- If you are buying a restaurant franchise for the first time you should be aware of Item 7 of the Franchise Disclosure Document. Many new restaurant franchise buyers are caught off guard by Item 7 which requires you to provide an estimate of the amount of working capital you will need for the initial three months after opening the restaurant franchise. According to the Franchise Disclosure Document the three month estimate is known as “Additional Funds.” When you review the initial build out plus the estimate of additional funds you must take into consideration that it will probably take up to two years to break even which means you must plan for operating in the red with out of pocket costs during this time period.
2 – The financial information of the current owner of the franchise is not required to be disclosed to potential restaurant franchise buyers. The disclosure of the financial information is optional and can be included in Item 19 Financial Performance Representations or FPR’s Financial Performance of Franchise Owners. If the franchise owner opts to disclose the information you will find it under Item 19 however, they are not required to provide this information under the laws of the Federal Trade Commission. This can leave the restaurant franchise buyer with many questions in mind about what their actual return on investment will be and if they should even invest in the franchise to begin with. The odds are that less than 15 percent of current franchise owners disclose their financial information and although the books and records are available, they are not freely available to potential buyers of the restaurant franchise.
3 – Item 20 of the Franchise Disclosure Document discloses the name of the current franchise owner but information on the current performance of the franchise is conveniently left out. If you search the Internet for information on purchasing a restaurant franchise you will find tons of advice on approaching the owner to learn more about the franchise. The problem with this is they will provide you with biased information about the restaurant franchise and omit the facts that you need to know about the business. If you ask them for financial information and current performance they will most likely refuse to disclose this data if they have made some mistakes and do not want to reveal this information in the financial statements. This will leave you with a void in the information you need to obtain in order to make an informed decision about the investment.
4 – As a restaurant franchise buyer it is important to be aware that if you are lucky enough to get the owner to share their financial information with you they may exaggerate the numbers in an effort to sell the franchise. More often than not the income is sometimes in the ballpark of around $30,000 which amounts to a very minimal hourly wage.
5 – The last piece of undisclosed information in the Franchise Disclosure Document is the data that reveals the turnover rate of franchise ownership. The only information that is required to be disclosed is the number of units in operation and the number of units that have closed. If people bought franchise restaurants in Atlanta from We Sell Restaurants and they have flipped them twice, it still counts as only one unit in the data of the Franchise Disclosure Document and does not include information on the depreciation of the unit.
Regardless of the drawbacks the franchise market in Atlanta continues to thrive and there are many franchise buyers out there looking for their next opportunity. If you are aware of the drawbacks you can face the market armed with the knowledge you need to find a profitable investment.
To learn more about buying or leasing Atlanta restaurants CLICK HERE
When buying a restaurant franchise in Atlanta there is information about the franchise that is disclosed by law and in accordance with the Federal Trade Commission regulations. The information is available in the Franchise Disclosure Document and can be helpful when you are looking to invest however, there is information that does not have to be disclosed by law but is crucial to your investment in a restaurant franchise. Here are five essential items that are not disclosed in a Franchise Disclosure Document:
1- If you are buying a restaurant franchise for the first time you should be aware of Item 7 of the Franchise Disclosure Document. Many new restaurant franchise buyers are caught off guard by Item 7 which requires you to provide an estimate of the amount of working capital you will need for the initial three months after opening the restaurant franchise. According to the Franchise Disclosure Document the three month estimate is known as “Additional Funds.” When you review the initial build out plus the estimate of additional funds you must take into consideration that it will probably take up to two years to break even which means you must plan for operating in the red with out of pocket costs during this time period.
2 – The financial information of the current owner of the franchise is not required to be disclosed to potential restaurant franchise buyers. The disclosure of the financial information is optional and can be included in Item 19 Financial Performance Representations or FPR’s Financial Performance of Franchise Owners. If the franchise owner opts to disclose the information you will find it under Item 19 however, they are not required to provide this information under the laws of the Federal Trade Commission. This can leave the restaurant franchise buyer with many questions in mind about what their actual return on investment will be and if they should even invest in the franchise to begin with. The odds are that less than 15 percent of current franchise owners disclose their financial information and although the books and records are available, they are not freely available to potential buyers of the restaurant franchise.
3 – Item 20 of the Franchise Disclosure Document discloses the name of the current franchise owner but information on the current performance of the franchise is conveniently left out. If you search the Internet for information on purchasing a restaurant franchise you will find tons of advice on approaching the owner to learn more about the franchise. The problem with this is they will provide you with biased information about the restaurant franchise and omit the facts that you need to know about the business. If you ask them for financial information and current performance they will most likely refuse to disclose this data if they have made some mistakes and do not want to reveal this information in the financial statements. This will leave you with a void in the information you need to obtain in order to make an informed decision about the investment.
4 – As a restaurant franchise buyer it is important to be aware that if you are lucky enough to get the owner to share their financial information with you they may exaggerate the numbers in an effort to sell the franchise. More often than not the income is sometimes in the ballpark of around $30,000 which amounts to a very minimal hourly wage.
5 – The last piece of undisclosed information in the Franchise Disclosure Document is the data that reveals the turnover rate of franchise ownership. The only information that is required to be disclosed is the number of units in operation and the number of units that have closed. If people bought franchise restaurants in Atlanta from We Sell Restaurants and they have flipped them twice, it still counts as only one unit in the data of the Franchise Disclosure Document and does not include information on the depreciation of the unit.
Regardless of the drawbacks the franchise market in Atlanta continues to thrive and there are many franchise buyers out there looking for their next opportunity. If you are aware of the drawbacks you can face the market armed with the knowledge you need to find a profitable investment.
To learn more about buying or leasing Atlanta restaurants CLICK HERE
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
Tips on Meeting with a Buyer When Selling Your Atlanta Bar
Atlanta restaurant sellers can learn how to keep a deal on track when meeting with an interested buyer.
When a buyer visits your Atlanta bar as a customer and decides they are interested they will request a meeting with you to see the rest of the operation. You will find that most buyers and brokers with experience will try to work around your business hours. Regardless if it is early in the morning or late at night, the buyer must understand that they need to be flexible with a business operation. You can also allow the buyer to view the backend operations posing as an insurance agent or other expected person that would visit the business during the daytime hours.
Here are a few ways that you can keep the deal on track during a buyer and seller meeting:
Never Meet Without the Broker
You never want to have a meeting with the buyer without the presence of your broker. This is because the broker can act as your mediator between your wanting to be helpful as possible to the buyer and the buyer wanting to obtain as many tidbits of information as he can. It is important to remember that not all buyers who inquire about your business will do so with the best intentions in mind. If they ask your broker a question and hear an answer that they don’t like chances are they will turn around and approach you with the same question in an effort to get the answer that they are seeking.
Don’t Share Copies of Financial Records
When you meet with the buyer it is okay to review and discuss financial information with a buyer that is pre-qualified however, never share copies of financial records with the buyer. This information should be channeled through your broker to protect your interests.
Don’t Offer a Business Card
Avoid sharing your business card with the buyer because this encourages him to contact you for a different answer than your broker provided which is similar to the scenario we described earlier. If the buyer requests your business card or tries to approach you with questions, always refer him to your broker for the information he needs. Tell your broker that the buyer has attempted to contact you so they can inform the buyer that he is violating the confidentiality agreement.
Be Personable and Brief
Try not to offer too much information during your meeting with the buyer. It is quite normal to be nervous which can cause you to reveal too much information about your business. You do not want to tell the buyer about situations that could raise issues such as telling him that you were once close to bankruptcy and you pulled out of it and built up the business to what it is today. Instead keep your answers brief, focused, and personable.
Don’t Be Late
Make sure you are on time for your meeting with the buyer. If you know your staff leaves at a certain time then schedule your meeting a few minutes or half hour after they leave so you are not held up by concerns or questions from your staff. Being late to the first meeting with the buyer may get the deal started off on the wrong foot.
Say Why You Are Selling
Always make sure you state your reason for selling. Although you may have shared the financial details, buyers always want to know the reason you are selling. When you are providing your reasons you should not reveal any personal information that is compelling you to complete a quick sale. First of all, this is none of the buyer’s business and secondly, it could cause you to lose your leverage with the buyer. So avoid telling the buyer that one of your business partners has cancer and only has six months to live.
It is okay to provide reasons such as disagreements among partners, retirement, lifestyle change, or taking care of your elderly parents in a distant location. These are all reasons that are understandable. Reasons that are not acceptable are age old reasons like you are pursuing other interests which doesn’t make any sense if you’re are currently running a profitable business. If you are involved with a franchise which isn’t doing well financially, it is okay to reveal this information. Chances are the buyer will already know by looking at your financial records.
Avoid Giving Advice
When it comes to legal advice or liquor license advice, avoid it at all costs and leave it to your broker to provide the legal resources and the contact information for the person handling your liquor license. While it is okay to tell the buyer the name of the person that handles your liquor license, avoid giving out any advice such as “The liquor license is no problem and here is all you do.”
Don’t Complain
If you have gotten hosed by your landlord or you realize you paid too much for the franchise this information does not concern the new buyer and may even raise issues that otherwise would not come up.
Don’t Provide Third Party Information
Avoid giving out your landlord or franchise contact information. Until your business is under contract the buyer has no legal right to this information. Furthermore, you do not want the buyer making contact with third parties that you have developed a relationship with. If the buyer happens to disrupt the relationships and then walk out on the deal you are left to clean up the mess. Instead send the buyer to your broker so they can control the third party contact.
To learn more about buying or leasing Atlanta restaurants CLICK HERE
When a buyer visits your Atlanta bar as a customer and decides they are interested they will request a meeting with you to see the rest of the operation. You will find that most buyers and brokers with experience will try to work around your business hours. Regardless if it is early in the morning or late at night, the buyer must understand that they need to be flexible with a business operation. You can also allow the buyer to view the backend operations posing as an insurance agent or other expected person that would visit the business during the daytime hours.
Here are a few ways that you can keep the deal on track during a buyer and seller meeting:
Never Meet Without the Broker
You never want to have a meeting with the buyer without the presence of your broker. This is because the broker can act as your mediator between your wanting to be helpful as possible to the buyer and the buyer wanting to obtain as many tidbits of information as he can. It is important to remember that not all buyers who inquire about your business will do so with the best intentions in mind. If they ask your broker a question and hear an answer that they don’t like chances are they will turn around and approach you with the same question in an effort to get the answer that they are seeking.
Don’t Share Copies of Financial Records
When you meet with the buyer it is okay to review and discuss financial information with a buyer that is pre-qualified however, never share copies of financial records with the buyer. This information should be channeled through your broker to protect your interests.
Don’t Offer a Business Card
Avoid sharing your business card with the buyer because this encourages him to contact you for a different answer than your broker provided which is similar to the scenario we described earlier. If the buyer requests your business card or tries to approach you with questions, always refer him to your broker for the information he needs. Tell your broker that the buyer has attempted to contact you so they can inform the buyer that he is violating the confidentiality agreement.
Be Personable and Brief
Try not to offer too much information during your meeting with the buyer. It is quite normal to be nervous which can cause you to reveal too much information about your business. You do not want to tell the buyer about situations that could raise issues such as telling him that you were once close to bankruptcy and you pulled out of it and built up the business to what it is today. Instead keep your answers brief, focused, and personable.
Don’t Be Late
Make sure you are on time for your meeting with the buyer. If you know your staff leaves at a certain time then schedule your meeting a few minutes or half hour after they leave so you are not held up by concerns or questions from your staff. Being late to the first meeting with the buyer may get the deal started off on the wrong foot.
Say Why You Are Selling
Always make sure you state your reason for selling. Although you may have shared the financial details, buyers always want to know the reason you are selling. When you are providing your reasons you should not reveal any personal information that is compelling you to complete a quick sale. First of all, this is none of the buyer’s business and secondly, it could cause you to lose your leverage with the buyer. So avoid telling the buyer that one of your business partners has cancer and only has six months to live.
It is okay to provide reasons such as disagreements among partners, retirement, lifestyle change, or taking care of your elderly parents in a distant location. These are all reasons that are understandable. Reasons that are not acceptable are age old reasons like you are pursuing other interests which doesn’t make any sense if you’re are currently running a profitable business. If you are involved with a franchise which isn’t doing well financially, it is okay to reveal this information. Chances are the buyer will already know by looking at your financial records.
Avoid Giving Advice
When it comes to legal advice or liquor license advice, avoid it at all costs and leave it to your broker to provide the legal resources and the contact information for the person handling your liquor license. While it is okay to tell the buyer the name of the person that handles your liquor license, avoid giving out any advice such as “The liquor license is no problem and here is all you do.”
Don’t Complain
If you have gotten hosed by your landlord or you realize you paid too much for the franchise this information does not concern the new buyer and may even raise issues that otherwise would not come up.
Don’t Provide Third Party Information
Avoid giving out your landlord or franchise contact information. Until your business is under contract the buyer has no legal right to this information. Furthermore, you do not want the buyer making contact with third parties that you have developed a relationship with. If the buyer happens to disrupt the relationships and then walk out on the deal you are left to clean up the mess. Instead send the buyer to your broker so they can control the third party contact.
To learn more about buying or leasing Atlanta restaurants CLICK HERE
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