Selling any business in a rush is never an optimum choice. But if you need to sell your B&B quickly, it could perhaps be that you, or someone close to you, has suffered an illness which makes it impossible to manage the regular commitment the hospitality business demands.
Or you might have experienced unexpected changes which will impact your business prospects.
It isn’t always possible to sell a business quickly, but this is what you should do to prepare for a quick sale and give yourself the best possible chance of securing the deal you want:
If at all possible, you should continue to accept bookings as normal.
When an owner is in your position and looking to sell, there is a great temptation to scale back your trading – perhaps turning down one-night stays or opening just for the high-season summer months.
This is understandable, given your circumstances, but any evidence of a decline in your trading may make selling even more difficult.
Any prospective buyer looking for finance will find lenders reluctant to commit once they note the downturn in historical profits. Another reason for trying to commit to ‘business as usual’ is that continuing to gather positive online reviews is the best way to ensure you still get to sell for a good price.
Looking at your preparation in broader terms, there would normally be a three-year preparatory period to achieve comprehensive results. But if time is short, you must at least have your financial records in good order and presenting a true picture of your trading over the last three years (or more).
Would-be purchasers will take a close interest in your business records, as will any due diligence team. So, you should be ready to answer a whole raft of probing questions about:
- Peak business periods
- Off-season arrangements
- The profile of typical guest categories
- Repeat bookings
- Your cancellation policy
- Your main local rivals
and much more.
In particular, you will be asked to explain the pattern of trading peaks and troughs that your P&L will reveal.
So, be very sure you can give accurate and relevant explanations of all your trading data.
When responding to seller-side queries, your absolute honesty about all business matters will do much to create an atmosphere of trust and confidence. In fact, experts agree that the truthfulness of your approach is considerably more important than the quality of the information you disclose.
You can also show an interested buyer that you are really ready for a quick sale by preparing a comprehensive handover package detailing all the important information about running your business.
This will help your buyer to conceptualise the ownership tasks, and also reassures everyone that you don’t intend to just disappear into the night!
Valuation and advertising
Your valuation is best completed by professionals who understand the hospitality market.
This ensures your premises will be assessed and valued using the customary methods for your sector. And, your valuers will also be able to highlight all the desirable features of your business which truly support the valuation figure they propose.
Many business brokers will be able to advertise your business for a quick sale and will also be able to discuss how to maximise your selling price. This is especially important, given that you will need good advice on how much you should be prepared to compromise on your final selling price in order to generate genuine interest in a quick sale.
And if you feel sufficiently knowledgeable about your business, are thoroughly prepared, and are confident enough to handle matters for yourself, then you could also advertise your business on BusinessesForSale.com.
At this stage, your seller’s professional team will scrutinise your business in great detail to test whether the sale valuation reflects the true value of your business.
This is where your careful preparation will begin to pay off. You should also respond to any requests for further information as soon as possible, otherwise this can create delays and perhaps cause a buyer to lose interest.
Finding a buyer will reward all your intensive preparation. But do check that any prospective purchaser wanting to buy your business has the necessary finance in place, because this could otherwise cause a significant delay in closing the deal.
And once the contracts have been signed, you can get down to enjoying your future life beyond the B&B.
By Jo Thornley, Head of Brand and Partnerships at Dynamis. Joining in 2005 to co-ordinate PR and communications and produce editorial across all business brands. She earned her spurs managing the communications strategy and now creates and develops partnerships between BusinessesForSale.com, FranchiseSales.com and PropertySales.com and likeminded companies.