For whatever reason, you might be thinking right now about selling your fish & chip shop. You might want to trade up, retire or even trade down. Selling a business can be tricky at the best of times so I wanted to put some thoughts together to try and help you make it less stressful.
Some of these pointers in my view could make running your fish & chip shop more enjoyable, so don’t be surprised if you do the below and don’t want to sell your business anymore.
If you are going to sell your business, in my view you need a three-year plan to get the most value, especially if you follow some of the tips below.
If you do sell, congratulations I hope you enjoy retirement or your new chosen path.
Even if your plan is to flip your fish & chip shop as soon as you can, you need to treat it like a long-term investment. Focus 90% of your efforts on the business itself, rather than the sale. If you have built a great company, you won’t be short of potential suitors when the time comes, but you won’t attract interest with a business that falls short of the mark.
The easiest businesses to sell are those whose financial arrangements are straightforward. If you have lots of family members, investors or shareholders with different ideas, it could present issues when you come to split the pie. In the same way, you need to make sure you keep personal and company finances transparent from the beginning. Purchasers will discover inconsistencies during due diligence, and any complications could threaten the deal.
If you want to sell your fish & chip shop, you’d better make sure it doesn’t depend too heavily on you. Any buyer will want to see a business that’s operating independently of its owner, so train your efforts on guiding and growing your company.
You’re more likely to find a buyer if your business is demonstrating profitability and growth. A hard-working company with stable returns will have plenty of potential buyers. You’ll get a better deal if you can show a solid track record and recurring revenue.
I often come across operators that have made the decision to sell their business because they’re ready for retirement or want to concentrate on other business interests, or just try something new. The problem is that they may have already started losing focus on the business and ‘winding down’ before they have made the decision to sell. Trade starts to tumble and so do their profits. I can’t stress enough the importance of concentrating on the business right up until the point the sale goes through, a buyer is not going to pay for the profit you aren’t making.
Any buyer will want to do both legal and financial ‘due diligence’. This is the investigation and research carried out by the buyer and their solicitors into the business; it highlights risk and identifies areas where the buyer might be exposed to future losses and costs. For the sellers, this will be the most labour-intensive part of the deal. Nonetheless, if everything is in order and readily obtainable, not only does it reduce the time the due diligence process takes, but it also avoids any last-minute price reductions as a result.
I’ve come across many businesses that don’t have a clear view of profit until their year-end accounts are prepared – this can be eight or nine months after the year-end. A buyer will want reliable and readily available management information.
As well as giving you timely information to act on, this offers the buyer comfort that there’s been no decline in the business right up to the point of completion – again protecting the value of all your hard work.
Monthly management accounts are good practice regardless but introducing them at least 12 months before embarking on a sales process will give comparable monthly information which can help you, and the buyer, track progress.
If you have done the above, then another trick up your sleeve is to be a confident salesperson. It goes without saying that if you’re a bit fed up, lost confidence, or just feeling a bit crap then this could affect the sale of the business, or it might give the buyer confidence to low ball you, thinking you’re desperate to get out.