If you are considering selling your hospitality business such as a pub, you may choose to appoint a skilled business transfer agent to source a buyer and facilitate the sale of your company. There are many genuine reasons you may wish to sell your business, such as owner retirement, health concerns, Covid-19 trading pressures or because your business has reached its natural end. The hospitality industry consists of a host of micro sectors, from restaurants, bars and cafes to event planning, hotels and lodging which requires careful exit planning.
As the hospitality sector employs over 3.2 million people according to UK Hospitality, the industry trade body for the UK hospitality industry, it is an instrumental force and significant income generator for the economy. From bars, catering, and nightclubs, to leisure centres, tourist attractions and contractors, the industry is essential to society, inspiring individuals to buy their own hospitality business.
The customer-facing industry highly depends on guest attendance to succeed which requires a proactive owner with the necessary expertise, resources and investment to steer the business to success. The hospitality industry provides an in-road to creative thinkers looking to breathe life into a concept, adapt to trends and support a range of employees and suppliers.
Selling your events business or restaurant consists of conducting a market appraisal to calculate how much your company is likely to be worth. A business valuation can help you establish an asking price which accurately reflects market value, ensuring that you are not undervaluing or overvaluing the company. By preparing your business for sale and seeking advice from business sale agents familiar with the business transfer trade in your industry, you can ensure that you do all in your power to maximise the worth of your company. By streamlining business operations, minimising outgoings and putting strict credit control measures in place, you can reduce your debtor book and protect the financial position of your company.
Putting your hospitality business up for sale can feel like an emotionally challenging task after physically building your business from just a concept and directing your efforts and investment towards company growth. If you are working against the clock to direct the sale of your company, enlisting expert support can help match your business with a suitable, genuine and serious buyer.
To attract buyers searching for their next acquisition in the hospitality industry, you will need to prepare your business for sale and collate the relevant financial records. The due diligence stage will create a window into the financial health of your company, giving prospective buyers a look into your management style and the performance standards adhered to.
The Selling My Business team can help you throughout each stage, from conducting a business valuation, understanding the intricacies of your business, assessing market share and profitability. Sale preparation will consist of due diligence checks which will impact the appeal of your business to potential buyers. Collating the relevant paperwork at this stage, such as financial forecasts and employee contracts can help the successful profession of your sale and show prospective buyers that your affairs are in order, reducing the likelihood of delays.
Connecting with the right buyer is vital to the successful sale of any business as if you are targeting unsuitable parties, your hospitality business may fail to sell. Due to several reasons, such as to protect employees, you may wish to market your hospitality business for sale discreetly. Your business transfer agent can pre-vet buyers to ensure that their finances match your requirements, sharing identifiable information only after a genuine expression of interest is shared.
"After four years of operating a popular restaurant in Cardiff city centre, I was on the lookout for an ambitious and seasoned buyer so I could focus my interests towards my other property business. The Selling My Business team generated serious interest which resulted in selling to a well-suited, competitive buyer. "
Christopher – Restaurant and Events Catering Business, Cardiff
Valuing a hospitality business consists of taking into consideration profit, loss, overheads, gross profit margin and the general financial health of the business. In addition to this, prospective buyers may be interested in the reputation of your hospitality business, such as online reviews, referral income and online presence. If your business depends on multiple ways to attract guests, diners or clients, such as through referral programmes, partnerships, word of mouth or social media, quantifying returns and sharing your success rate may increase the appeal of your hospitality business.
The Selling My Business in-house team of business valuers will assess the value of company assets and liabilities to ensure that your business is healthy and has enough cash to sufficiently fulfil financial commitments. If your hospitality business is juggling VAT payments, asset finance instalments and the likes of invoice finance facilities, in addition to a backlog of outstanding creditors payments, streamlining your payment plan can help manage expenditure. By highlighting responsible borrowing and an airtight debtors book, you can increase the worth of your hospitality business.
If you are wondering how to value a hospitality business, the Selling My Business team can help you prepare your business for sale, take you through which factors influence company worth and how to maximise market value. We offer a hospitality business valuation and we also take pride in providing a transparent service, hence charging no upfront fees. If you appoint a business transfer agent, a company valuation is typically included part of the process, free of charge, however, this may vary if you seek the services of a broker or act independently.
To begin the company valuation process, we will require three years’ worth of recent/historic accounts to assess the performance of your hospitality business. Our hospitality valuation team will guide you throughout the process and illustrate how business worth will be calculated. The market appraisal will thoroughly delve into the health of your company, income stream, overheads and growth potential. The latter is a significant contributor to company value as if your business has the potential to break into new markets, expand services and own a larger share of the market, ambitious and progressive buyers are likely to express interest at the opportunity to buy your hospitality business.
The coronavirus pandemic instigated a slowdown of trade for non-essential hospitality businesses, leading to an income cut-off. As a result of the unprecedented challenges which unfolded as a result of Covid-19, many hotels, cafes and restaurants were forced to seek emergency financial support from the government to stay afloat. As guest homes were instructed to close their doors to visitors and occasion hire venues paused trading as a result of cancelled or postponed events, business owners in the hospitality industry were left fighting for survival. By adapting and reacting fast to the changing economy, many emerged at the end of the national Covid-19 lockdown unscathed by revising contingency plans and preparing for harsher trading conditions.
If your business is struggling to cope with the adverse impact on trade as a result of Covid-19, such as a nosedive in profits and dwindling consumer demand, you may look to sell your business to facilitate an exit. There is a dedicated market for the sale of financially distressed businesses, populated with insolvency and business turnaround experts interested in acquiring ailing hospitality companies. Company recovery specialists regularly contribute time and money towards rejuvenating poor performing business which can be cost-effective by preserving the original structure of the business. As an alternative to a company liquidation, this route can generate returns and result is transferring your hospitality company to a financially stable owner better placed to lead operations.
The Selling My Business team have been navigating the sale and acquisition of hospitality businesses since 1956 on behalf of business owners, showcasing over 60 years of delivering outstanding service and impressive results. We have a strong track record of matching businesses of all sizes in the hospitality and events industry with potential buyers, having built a strong database of over 10,000 registered buyers. The Selling My Business team are specialists in several sectors, including food, media, entertainment and events.
We take pride in providing a full service, ensuring that all your affairs are managed in-house by our expert team with collective experience of 100 years. We have a highly experienced team of valuers who can provide a valuation of your business to determine how much your hospitality business is worth. By accessing our industry knowledge and experience in the business transfer industry, we can help maximise sale value and successfully prepare your business for the sale process.
For more information on selling your hospitality business, call one of our industry experts at Selling My Business. We have a wealth of industry experience and a strong track record of successful sales, from self-catering lodge parks, hotels and pubs.
Contemplating selling your business? Our free, comprehensive guide will walk you through how you can sell your company. Our FREE guide covers all of the essentials, including:
• Are you appointing an experienced advisor?
• Are you giving your business a realistic sales price?
• Will all potential buyers for the business be approached?
• How much will the sales process impact business performance?
Plus much more...