BEST PRACTICE // For sale
Is it a good time to sell your venue? There are more buyers than sellers for hospitality businesses right now. WORDS Ken Burgin
THINGS AREN’T AS gloomy as you’d think. The market for cafés and restaurants is upside down right now, with more buyers than sellers. Who’d have thought? Business broker Paul Leach works in Sydney, Brisbane and Canberra, and says he’s never seen a
Think of the whole process as exit planning, and even if you’re not ready to sell, start anyway. It’s very satisfying
seems wrong, they get nervous and it can drive the sale price down. Some buyers accept bookkeeper’s or accountant’s reports; others want to see the original Xero file and matching documents. Drawnout due diligence can drive down the
situation like it, with buyers chasing sellers
to update systems and make
and offers increasing above pre-COVID
your business more efficient,
Have everything at hand, so verification
profitable and easy to run.
is painless: documents attached in Xero
An offer may arrive that you
the books. Ensure your wages are award
levels. Leach attributes the interest to people who’ve lost jobs wanting to create their own business, or lockdown has given them the impetus to make a career change.
can’t resist.
price, so make it easy and transparent.
and an electronic filing cabinet to validate compliant and check that POS reports match Xero sales figures, which flow
Well-located businesses (especially in the
Buyers are looking for a business that will
through to BAS reports. If staff super and
suburbs) with access to JobKeeper and rent
make them money, so the current profit
BAS payments are behind, they’ll know
reductions have seen an increase in profits,
is important but not always essential.
the business can’t meet its compliance
and the chance to diversify and streamline
It’s good to know the buyer’s motive,
obligations and is probably unprofitable.
operations — hence the reluctance of
eg: site acquisition for growth, location
Does this match the story you’re telling?
many owners to sell. Sale price multiples
for a broader strategy or profits to fund
remain at one to two times annual profit,
owner-investors or family. They may see an
organised, easy to learn and ready to use
depending on the ease of operation, quality
opportunity in a poor-performing business
— rostering, recruitment, food and liquor
of the lease and local prices — it’s not
they can buy cheaply and turn around for
ordering, menu changes, social media
based on what you paid for the business.
their own plans.
and marketing, website updates, security,
One essential value driver is profitability,
But as a seller, there’s a limit to what you
Plus all the passwords and login details
so a good set of numbers and bookwork
can ask for an unprofitable place. You can
needed for a smooth transition. It’s like
to verify this will be crucial. “Bookkeeping
say it has ‘loads of potential’, but that story
selling a master key; turn it in the engine
is storytelling for stakeholders to enable
has been heard many times. As the vendor,
and everything just works. Think of the
decisions and compliance: business
you should do everything possible to make
whole process as exit planning, and even
owners, banks, investors, ATO and buyers,”
the buyer confident and enthusiastic about
if you’re not ready to sell, start anyway. It’s
says Bookkeeper Christine Green. “Start
their decision.
very satisfying to update systems and make
Have your operational systems well-
COVID compliance and daily operations.
cleaning up and organising your accounts, so you have a history ready for sale time.”
14 | Hospitality
your business more efficient, profitable and Buyers are looking for trustworthy and
easy to run. An offer may arrive that you
credible information. If the bookkeeping
can’t resist.■
