Looking to sell your business? So the big question…How much is it worth?
First detach yourself emotionally from the business then ask yourself the following question: “Knowing what I know now, about my Café/Restaurant/Bar, it’s profits, does it even make a profit?, its advantages and disadvantages, all its benefits and drawbacks, comparing it to other hospitality & investment opportunities that I could invest my money in, how much would I pay for it” It’s all about profit…Profit. Profit. Profit!! When buyers are looking at potential businesses, what they are really looking for is proof of profit. It’s as easy as that – you do not need to pay an accountant to tell you this. Your café value is based on how much profit its makes, not how much your fit out cost you or the blood sweat and tears you have put into the café over the years – solely on the profit and the Return on investment (ROI) that you can verify to a buyer they can achieve out of the cafe.
When a Café/Restaurant/Bar owner is intending to sell their business some of the questions your Just Business Broker (jbb) broker will ask you in order to value the business are as follows:
1. What is the net profit per week
2. Is the business owner/operator or under management?
3. Do you pay yourself a wage? If so, is this before or after your net profit?
4. How many days a week is the business open?
5. Do you own all of your plant & equipment or are there hire purchase agreements in place?
4. What are the terms of your lease i.e. 5 years plus 5 year option?
After answering these questions along with a number of other key questions, we use a hospitality industry specific formula to calculate the TRUE VALUE of the business.