Like for every other business, as a restaurant owner in Dubai, there might come a day when your circumstances could change so much so that you decide to sell up. You may have discovered that running a restaurant is not for you after all and decide to cash out some profits. Or, having made a success of one restaurant you may want to trade up to a bigger establishment. Whatever your reasons for selling, here are six essential points to keep in mind when selling a restaurant in Dubai.
1. Start preparing well in advance
It takes three months on average to sell a restaurant, and you need to start preparing six months in advance to make sure you have everything in order. Ensure that your restaurant oozes curb appeal, such that anyone passing by or walking in is impressed with the presentation.
Keep the garden neat and tidy, invest in a fresh coat of paint and ensure your signage is in good repair.Make sure your equipment is up to date and in good working order. If anything looks run down this will give the impression that maintenance has been cut back on and that could suggest an underlying issue with profitability. You’ll also want to ensure that your staff are friendly, capable and committed.
Be aware that a restaurant under management will be worth more, as buyers are often looking to buy a revenue stream, rather than having to conduct the day to day operations of the business.
2. Boost your online presence
Freshen up your website and/or your Facebook page, and run some promotional offers and discounts to ensure that your restaurant is busy with customers. Maintain a respectable database of regular customers and make use of online booking widgets, as these are a great way of growing your customer database.
3. Prepare your financial profile
ensure that your have a detailed record of income, expenses and financial statements for the last six to nine months as well as one years profit and loss statements for evaluation. List your inventory and assets, including specialised equipment and furniture. Buyers will want to see detailed figures in a standardized format. Buyers may have cash to spend from a payout or sale of a previous restaurant sale, but those financing through a bank will rely heavily on your financial records.
4. Lease and license records
Speak to your landlord about the status of your lease and the possibility of transfer to a new owner. Ensure that your permits, liquor license and most recent health inspection results are up to date, legally compliant and available for inspection.
Buyers will want to know your reason for selling, what your relationship with your landlord is like and the length of the lease. Maximise the value of your restaurant by keeping documented agreements with managers, employees and suppliers.
5. Engaging a business broker
Hiring a business broker to handle your sale your sale may be well worth the brokerage fee of 10 – 25% that they will charge on average. A broker will have an established network of potential buyers on hand that could significantly reduce the time needed for selling a restaurant in Dubai, and will weed out time-wasters. A broker can also assist you in negotiating non-compete terms.
You could rely on word of mouth, social media, or use an online business-for-sale platform, but this will probably take longer. Whichever route you choose, set a realistic asking price and be sure to keep negotiations professional and friendly.
6. Know when the time is right to sell
Waiting until business slows down will reduce the value of your restaurant and the sale price. The right time to sell is while its in its growth phase and doing well. This way selling will afford the opportunity to scale up, if that is what you desire.
Xcel Accounting has over 15 years of experience in finance and accounting, and extensive experience in consultancy and the industry. We offer comprehensive accounting and finance outsource services to small and mid-sized companies and can bring financial expertise to your business. We’re committed to helping Dubai businesses take the reins on their financial strategy, by taking care of all their accounting needs.
Book a consultation session today with us and we will help you take an informed decision before selling your restaurant in Dubai.