Food and Drink - Spring 2014 - 10

successful sale: by wade kruse

Sell-Side Due Diligence
Restaurant owners should follow five steps to get ready for a sale.

Know your business to ensure a
successful and painless sale.

S

Sellers, take heed. If you want to maximize value in your
restaurant sale, you'll need to get your house (and books) in
order. As a seller, there are certain basic pieces of information
you need to have regarding your business. You should be able
to answer a number of questions that buyers will have related
to the business. For example, what are the key risks in the business? Is the growth plan viable? How is the restaurant positioned in relation to its competitors? Are the margins sustainable? What skeletons are hidden in the closet?
Simply put, a seller needs to understand the buyer's perspective on the
transaction. This is one reason sell-side
due diligence, which is when the seller
implements an investigation into their
own business' revenues, expenditures,
market and risks, can be beneficial.

10 food & drink * spring 2014 * www.fooddrink-magazine.com

Due diligence provides the seller
with an independent view and helps
them see the business from the buyer's
point of view. It also arms the seller
with knowledge of where a buyer may
try to poke holes, or uncover opportunities that the seller may have missed.

This generally improves the speed and
certainty of a closing.
1. Get comfortable with revenue
In the current economic environment,
buyers are increasingly uncertain
about the reliability of revenue and
profit projections. They will want to understand what the revenue looks like
on a normalized basis.
A first and relatively simple step is to
be able to provide proof of revenue by
linking revenue to cash deposits.
2. Tie down business costs
The good news is that like revenue,
the majority of business expenses can
be supported by third-party documentation, such as the company's
vendors.


http://www.fooddrink-magazine.com

Table of Contents for the Digital Edition of Food and Drink - Spring 2014

Contents
Food and Drink - Spring 2014 - Cover1
Food and Drink - Spring 2014 - Cover2
Food and Drink - Spring 2014 - 1
Food and Drink - Spring 2014 - 2
Food and Drink - Spring 2014 - Contents
Food and Drink - Spring 2014 - 4
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Food and Drink - Spring 2014 - Cover3
Food and Drink - Spring 2014 - Cover4
http://www.nxtbook.com/nxtbooks/knighthouse/fd_vol19_issue4b
http://www.nxtbook.com/nxtbooks/knighthouse/fd_vol19_issue4a
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http://www.nxtbook.com/nxtbooks/knighthouse/fd_2017winter
http://www.nxtbook.com/nxtbooks/knighthouse/fd_2017fall
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http://www.nxtbook.com/nxtbooks/phoenix/fd_2015summer
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http://www.nxtbook.com/nxtbooks/phoenix/fd_2014winter
http://www.nxtbook.com/nxtbooks/phoenix/fd_2014fall
http://www.nxtbook.com/nxtbooks/phoenix/fd_2014summer
http://www.nxtbook.com/nxtbooks/phoenix/fd_2014spring
http://www.nxtbook.com/nxtbooks/phoenix/fd_2013winter
http://www.nxtbook.com/nxtbooks/phoenix/fd_2013fall
http://www.nxtbook.com/nxtbooks/phoenix/fd_2013summer
http://www.nxtbook.com/nxtbooks/phoenix/fd_2013spring
http://www.nxtbook.com/nxtbooks/phoenix/fd_2012fallwinter
http://www.nxtbook.com/nxtbooks/phoenix/fd_2012summer
http://www.nxtbook.com/nxtbooks/phoenix/fd_2012spring
http://www.nxtbook.com/nxtbooks/phoenix/fd_2012winter
http://www.nxtbook.com/nxtbooks/phoenix/fd_2011fall
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