So I've had my custom cake shop for several years; started it from the ground up. I have six FT employees, and rent a small space in a nice plaza. All is well, and the business is growing. But I work WAY too much and although I still enjoy decorating cakes, I am beyond burnt out! The daily rigors and stress is just too much for me anymore. So, anyway, I'm at that point where ready to let someone else take the reins.
I've been researching business brokers; there is one that I know of in my area that specializes in selling restaurants. But is that really my best option?
I know I don't want to sell it myself. :/ I don't have the expertise or the time. And I have to be discreet of course, so my customers/clients/employees don't panic.
Does anyone have experience or advice regarding selling a business? What you wish you knew before you began the process, or what you would have done differently… or the same?
Its's an annoying process, but you clearly need to do something, right? I worked with a broker one time and it wasn't too bad. Think about this in the same way as selling a house. There are several steps to go through, but a business broker (or real estate agent if you were selling a house) would work on your behalf. You are not entirely alone.
To come up with a price, you'll need to have your bookkeeping in order. Secrets rarely stay secret, so think about how to deal with employees and customers. I wish you well in the process, and best of luck in your new life.
IMO, you need to be upfront with your employees and tell them first. Heaven forbid they should hear it from anyone else. Simply be honest with them and make sure they know you're not going to throw them to the wolves, that they'll get as much notice as you can give them. You might actually end up selling it to one of them - - you never know.
Whether you use a broker or do it yourself, be prepared for it to take several months to a year depending on your area. You'll have many lookey-loo inquiries and probably as many customers saying they'd like to buy it, but.......
Good luck and I hope things work out just the way you want.
Where are you located? Maybe someone here would buy it!! I don't have any advice, but lots of wishes for good luck.
I have sold 2 business (professional services - not cake) and both times we did it ourselves. We advertised in the respective professional publication and membership websites. We started a new email address (that gave no hint of person or business name) to receive the enquiries. We then did our research on the enquirer to determine their skills/ability to pay before responding appropriately and with great consideration.
All 'lookers' must sign a confidentiality agreement before seeing any of your figures, your business name etc. These usually come with clauses that they will not approach any employee to discuss the sale of the business, and must make appointments to discuss the sale and never just rock up to the place of business/shop with a question in front of staff. It still allows for the buyer to a 'customer' and sus out the business that way (try the product, assess customer service), but you have their name & details before they have yours.
Once a buyer has been found/approved/price agreed etc - the final sale clauses were given to our legal person to draw up contracts. So, paid for legal fees, but no agents commissions. All went well from our end on both occasions.
We have enquired with many a business broker about businesses we would consider buying. Most of them have had the vendor totally organised with the right financials & business info before its is advertised, which is very helpful and saves soooo much time.
Those who went without a broker had useless info, and told stories that never added up when you enquire deeper. Ie 'my wife works in the business, I pay her $840 a week....oh those financials were when I only paid my wife $360 a week, I gave her a pay rise two weeks ago". Also loved this one...[vendor] "business will support 2 families"... [me] "I cant quite see how $60,000 profit will support 4 adults and their children".. [vendor] "I based that assumption on sacking all the staff and the 4 purchasers doing all the work instead". (place palm on forehead and hit a few times)
But I have also had brokers that were fed lies by the vendors too, and you can just see their face drop when the deeper questions reveal illegal practices ie [me] your dossier mentions 4 staff members, but you just mentioned more than four job titles/roles" [vendor reluctantly] yes we have 3 staff we pay cash under the table so they dont loose their welfare benefits".
The best benefits of a using broker is ... (1) they are weeding out the tyre kickers from the real buyers (2) they are the negotiators on price and questions so you can hide your own emotions from the buyers (ie excitement at an offer). Also - if you have briefed your broker well, they can answer many questions on your behalf without your staff knowing.
good luck to you!!
LOL Magic Mouthfuls, those are some stories!! Of course you want to show your business in the best light, but it's horrid to be so deceptive about it. Reminds me of when I bought a used car from a private seller, and the check engine light went on two miles down the road. That's a crappy thing to do to someone.
Luckily we run pretty clean and mean. I have a business accountant and a payroll company and everything is by the book. I know you have to get all your ducks in a row before selling so everything is as perfect as possible for a clean sale, and continued success to the new owner. I am in the process of revamping and improving a few items anyway, so I think I'll shop for a broker while I catch up with the little items on my to-do list.
jgifford, I've read and heard it's actually unkind to tell employees you are attempting to sell. If it took a year to find a buyer, that would be an extra year of stress for the staff. Once things got serious, I would let them know immediately, and let them know what the potential buyer's intentions were. And if it didn't sell, well, no one would have to go on an emotional roller coaster ride but me. I suppose you could think of it as dishonest; I did at first too. But the more I find out, the more I see it's for the best.
rsquared02, I prefer to stay anonymous on boards to protect my privacy. I don't get much privacy anymore, owning a business, so I cherish being able to speak freely. Google my business name and you can find out my home address, how many kids I have, and what awards they've won at school, and what we had for dinner last night! ;) Besides, I don't think this board allows anything that could be construed as advertising/selling. It would be a great place to sell though, it's too bad there's not a forum for it! (I imagine it would put the board owners at some sort of weird liability, for some sale of a cake pan gone wrong, lol!) But you're right, lots of cakers here whose dream would be the very thing I am ready to move on from; oh the irony!
Thanks for the input, folks. I will just keep on trucking for now. Perhaps I will update as I go, in case this type of info is useful to anyone in the future!