What to Consider When Buying a Business based on Location!

Accessibility and Parking  

The best area to buy a business comes down to the accessibility. Having an inconvenient location, tough accessibility and little to no parking can be enough for the customer to walk right past your business. Having your business in a high-traffic location can ensure an increase in customer growth and overall foot traffic. On the other hand, accessibility is not only for the customers. Does your business have the ability to allow safe and easily accessible deliveries? Is your business in a wheelchair-accessible zone? Having overall accessibility is key to driving growth and attraction for your business.

Foot Traffic

Good foot traffic can help Businesses gain exposure. You don’t want your business being bypassed by pedestrians if it’s tucked away in a corner. What we want is for business owners to maximize their profits and grow foot traffic for their businesses. To ensure that there is foot traffic, look at maps in the local region and areas that show good foot traffic. 

Having Other Businesses Nearby

Aside from location, consider the building structure, contents, and the work environment of the business. It is also good to have an adverse relationship with other businesses as it can create a prosperous economic relationship. If there are businesses nearby that would benefit your business, it’s a good idea to have your business close by. 

Safe Location

The history of the location is also very important as it can determine how safe the area is. You want to ensure that your business is in a safe and secure location. The safety of your business depends on many factors but the most important one is the location. 

How To Buy A Business

The Business Exchange has been working with brokers for over 25 years with business listings. To view, more businesses go to the Business For Sale section. For more information, questions, or concerns please call 1-877-337-1188. If you’re interested in selling a business, Business Exchange can help make that happen.

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Here are the Most Profitable Commercial Properties.

Student Housing

Student Housing is deemed profitable commercial property due to there being many units sold as well as the high demand for student housing. Students are constantly looking for housing no matter what. You can increase the price to any amount you want. There are also limited working and office hours for deciding how early or late you want to close. There is potential for long-term housing especially if a student doesn’t want to move and find different places each year.

Apartments

Apartments are in high demand and with the housing crisis on the rise globally, this is a great investment as many people are in need of housing. This is extremely profitable as people are paying monthly for rent. Depending on how many units there are in that apartment you can make as much as $150,000+ a month. It is also not a risky investment as people will always be in need of a new home. If you invest in apartments, you can also get tax benefits compared to other commercial properties. It also helps build equity over time as the property appreciates over time.

Office Buildings

Office Buildings are profitable for renting out to many different companies. The only risk with office buildings is that they can create a loss if companies decide to switch to a remote work setting. Getting an office building can help diversify your portfolio and adapt to different industries using the office space. 

Retail Space

With commercial retail space, tenants pay maintenance fees, property tax, and insurance. If there are already tenants in the plaza when you purchased it, you can choose to keep them in the plaza or have them leave once their contract is over. Also when you buy out a commercial plaza, the deposit is lower compared to typical residential properties. There is lots of availability for any tenants to be a part of your commercial retail space.

Flex Industrial Spaces

Flex industrial spaces are a hybrid of office space. It’s a good alternative if you don’t want to commit to having a full office space. Its low-cost renovations allow you to customize it in the way that you want. Flex industrial spaces are triple net leases, which means that it has the potential to bring in more income than the average commercial property. Instead of short-term leases, these tenants tend to stay a very long time which means maintenance fees and other fees will be paid by the tenants. Triple net leases tend to have a really high return on investment (ROI)

How To Find Commercial Real Estate Listings

Business Exchange has been helping Commercial Real Estate Brokers for over 20 years, helping them sell their listings. Find commercial properties for sale, commercial buildings, office space, and land for sale. All commercial property listings can be found here. You can also find commercial brokers and get in touch with them.

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Here Is a Guide to Help Differentiate Between Commercial and Residential Mortgages.

Personal Income

The key difference between commercial and residential mortgages is that commercial mortgages don’t take your personal income into consideration whereas residential mortgages need to look at your personal income to see if you’re eligible for the mortgage. With commercial mortgages, they believe personal income should not be a factor when it comes to repayments of the loan because they believe the property itself bought from the commercial mortgage is enough to pay for itself

Processing Time

Commercial mortgages tend to have a shorter loaning term compared to residential mortgages. In commercial mortgages, it could take up to 6 weeks in order to process the commercial mortgage application. In residential mortgages, the application is typically faster, only taking 2-3 weeks.

Down Payments

For down payments in commercial mortgages, they expect you to put down a higher down payment compared to residential mortgages. But for commercial mortgages, if you’re purchasing the property with the intent of renting it out to others, the lenders will usually fund 75% of what the property is worth. (Usually houses, office space/ retail properties) Lenders or banks will only fund 65% of an industrial warehouse or other commercial properties.

Interest Rates

When comparing interest rates between residential mortgages and commercial mortgages, the interest rate on commercial mortgages will always be higher than residential. The reason being is that lenders and banks believe there is a higher risk of the borrower failing to fulfill the obligation which is repaying the loan.

Process Of Obtaining a Mortgage (Commercial vs Residential)

The process of obtaining a commercial mortgage will be more costly than a residential mortgage as commercial mortgage lenders tend to ask for more paperwork compared to a residential mortgage. In a commercial mortgage, they require an environmental report and a building appraisal report. An environmental report isn’t cheap, to get a thorough analysis conducted by an environmental auditor, it can cost around $2000 and upwards. As well as getting a building appraisal can cost up to $3000. These two reports play a big part in why the process of getting a commercial mortgage takes longer in comparison to a residential mortgage. If you use a broker with a commercial mortgage, the broker will charge a fee as they aren’t receiving a commission. Whereas, with a residential mortgage, brokers receive a commission.

How To Access Residential And Commercial Mortgage Services

Business Exchange has a section that has all the business services available. If you’re in need of a business service such as getting residential or commercial mortgages, going to our business services page will help. If there’s any questions regarding our business services, please call 1-877-337-1188

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Here Is a Guide to Help You Find What Loan Is Most Suitable for You.

Commercial Loans

Commercial loans are used to help people start a business or own commercial properties. It’s a great way to borrow a loan especially when you already have a business. Consumer loans are usually unsecured which means they don’t need any sort of security in order to repay the loan. There are two types of commercial loans, short-term and long-term. Getting approved for a commercial loan varies as it depends on the person’s credit score and debt-to-income ratio. Commercial loans usually have lower interest rates than other types of business loans. Most of the time commercial lenders may ask; what your intended use for the money is, what your general business growth over time is, how much money you’ll earn before taxes, and other details regarding your business.

Consumer/Personal Loans

Consumer loans, also known as personal loans, can be used for just about anything except for university/college education and illegal activities. Consumer loans typically have repayment terms between 24 to 48 months. Consumer loans come in two forms, secured and unsecured. Secured loans are backed up by a replacement in case you can’t fully pay it off. An unsecured loan is when it’s not backed by a replacement and only your signature. Unsecured loans are typically more expensive and people will need better credit. Applying for a consumer loan is very easy and can be done through a bank, credit union, or online lender. 

Small Business Loans

There are different types of small loans that help with specific things but today we will talk about the basics of small business loans. Small business loans will typically have a lot more requirements than the average loan. Small business loans can help with purchasing commercial equipment, doing renovations to the business, or buying new commercial property. These loans catered to small businesses can help with the overall growth of the business.

Land Loans

There are many different ways to finance vacant lots and raw land. The most common type is either the land title loan or the vacant lots and raw land mortgage. The land title loan is a secured loan where if the borrower cannot pay the full amount they borrowed, the title and the rights of the land will go to the lender. With vacant lots/ raw land mortgage, the down payment is a lot more than the average mortgage. That being said, vacant land is much riskier to loan money to as the land is not occupied right away. There are lower resale opportunities if the borrower decides to resell the undeveloped land and risky future land-use changes by the law.  

How To Apply For Loans

Business Exchange has a section that has all the business services available. If you’re in need of a business service such as needing help applying for loans or needing help going through the process, going to our business services page will help. If there are any questions regarding our business services, please call 1-877-337-1188

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In 2006, NHance Quebec Wood Refinishing Franchise was founded by Chem-Dry Carpet Cleaning, the world’s largest commercial carpet cleaning company. Chem-Dry Franchise owners realized that their technicians were walking across damaged floors and this is what started the idea of NHance Quebec Wood Refinishing.

Wood is the most common material used by builders. NHance Quebec capitalizes on this by specializing in restoring the shine and lustre to wooden surfaces.

NHance Quebec Franchises offers their customers an innovative and affordable cabinet and floor restoration service that will touch up your wooden cabinets and floors without the dust, inconvenience and harmful fumes associated with traditional finishing methods.

The NHance Wood Finishing process deeply cleans the surface, removes old coatings, repairs damaged areas and applies an elegant factory quality finish. Everyone will love the brilliant results… and the reduced costs. 

The NHance organization is experiencing more and more growth every year. In 2013, N-Hance had 220 units. In 2014, we had 310 units. As of today, there are currently over 375 franchises in the United States and Canada. At the corporate level, we have 20 dedicated team members in the sales, marketing, business management, and training departments.

If you are looking to Build a Home Improvement Business,

Start a franchise with NHance Quebec Today!

Key Elements of Our Success

• #1 Wood refinishing company in the US
• Great home improvement franchise opportunity
• Independently owned and operated
• Become an expert on floor refinishing, staining and high-tech sanding process
• We offer healthier options than traditionalwood refinishing
• Get access to exclusive Lightspeed Plus Top Coating

NHance Quebec Franchise Opportunity

NHance Quebec Products & Services

We equip our franchisees with the industry’s best equipment, products, and processes that produce amazing results and delight customers. For almost 10 years we have been committed to researching and developing an extensive product line that is compatible with all NHance Quebec products and is sold exclusively to NHance Quebec franchisees.

Low Initial Investment

Typically when it comes to service-providing franchises, investment costs increase as the brand grows and develops. At NHance Quebec, we’re proud to have maintained low initial investments since beginning in 2001. We also provide low initial investments by:

• Replacing cash surpluses with motivated and hard-working individuals willing to succeed.
• We provide essential tools for success.
• Franchisees provide a great work ethic and delighted customers.
• Lowered interest rates.
• Increased borrowing amounts.

We want to make sure that we support our franchisees – if they fail, we fail. Our partnership turns into a successful and intelligent relationship when both parties are working together for the same common goal.

Low Overhead Structure

The most important aspect of any business is the customer. NHance Quebec helps franchisees take care of the customer by removing the financial stress, because we understand that cash flow is king when operating a business, so we always look for possibilities for our franchisees to minimize costs in order to maximize profits.

We offer low overhead costs so that N-Hance owners have accessible cash on-hand, which allows your NHance Quebec business to operate in a constant growth mode. Ideally, we can also help minimize costs through options to operate away from a store, like a home office and work van.

Built-In Lead Sources

After a new franchise signs their contract, they are able to hit the ground running with legitimate leads and jobs because of our partnerships and national marketing efforts. With that said, when a new franchisee buys into NHance Quebec, they buy into a well-established power and presence on the internet. Our regional website nhancequebec.ca, generates leads and business for each franchise by informing customers of our services and directing them to individual franchise pages.

Currently, NHance Quebec is found in over 1700 of the 1900 Home Depot stores across the nation. Each Home Depot has a permanent display in the kitchen department featuring our various service options (Currently in the U.S. only). This built-in lead source provides franchisees with a lead generating opportunity right from the start without having to spend much money upfront.

Marketing Support

Marketing and advertising are the most important elements of operating a successful business. NHance Quebec has created an online wealth of marketing materials including mobile-optimized websites, press releases, stock photography, commercials and an NHance Quebec visualizer app to help our franchisees to market their products.

1. Establishing a merchandising presence in the stores

The Home Depot has put many resources into helping create a permanent display in every kitchen department where NHance Quebec services are available. We have also been featured in many print ads and circulars put out by Home Depot in many major markets.

2. Conduct product and knowledge training

Part of our partnership with The Home Depot is to ensure that associates fully understand our service. By helping them better understand NHance Quebec, they help you get more clients!

3. Create a strong relationship with store associates

In addition to helping Home Depot employees understand the NHance Quebec service, we also focus on building relationships with store associates. We’ve found this is the best way for franchise owners to generate business through a Home Depot store.

How Much does it Cost to Start an NHance Quebec Franchise?

At NHance Quebec, we are far more interested in recruiting great people who are enthusiastic about owning a business than we are in finding people with lots of cash to spend. For this reason, we offer in-house financing and have some of the lowest start-up costs in the industry. We do not want high start-up costs to stand in the way of you owning and growing your own business, so we provide a cost structure that allows you to purchase an NHance Quebec business for as little as $41,250 down.

We offer major financial benefits over other franchise companies:

• In-house financing
• Low start-up costs
• Protected, exclusive territories
• Initial Investment: $41,250
• Initial Equipment Package: $49,500
• Total Investment: $90,750

Testimonials from NHance Franchise Owners

“I love that it’s a national brand and that there is a national footprint emerging with some cohesion there. I love the camaraderie with other N-Hance owners and I also love that it really is a local business.”

– David Lantow

“The #1 thing that I hear from customers that they love is that it can be done in 1 day. There’s no clean up after we’re gone. There are no smells, no odors, and they can be using their kitchen an hour after we’re gone. They love it.“

– Mike Rozo

“What I like most about being a part of the N-Hance family is the support I get from HRI. If I have any issues, it’s nice that I can turn around and get them resolved quickly. Do it. Just do it, because all I see is great things coming out of this company and the business. We are a very unique business. There’s not a lot of competition out there so I would recommend it highly.” – Michael Depasquale

If you are looking to start your own Home Improvement Business, Contact NHance Quebec Wood Refinishing Franchise Today! The Leading Home Improvement Franchise Opportunity in Canada!

The post NHance Quebec Franchise appeared first on Business Exchange Blog.

STEP #1 – Deciding to Sell Your Business

Making the decision to sell your business is the first step in a series of processes to close the deal. Although it may seem simple, remaining confident in your choice is very important and will help solidify your motivations for pursuing an exit strategy. The most common question prospective buyers ask is: Why are you selling your business?

Knowing the answers will give you determination and help you in dealing with inquiries from prospective buyers.

Avoiding Seller’s Remorse: What’s your Why?

Your “why” is what will motivate you to create a strong and determined exit strategy. When deciding to sell your business, weigh out the pros and cons of selling your business and seriously consider your reasons and motivations. Staying confident in your decision will help motivate you to plan and execute a purposeful exit strategy.

Common Reasons Why Business Owners Decide to Sell: 

• RETIREMENT: Leaving the workplace behind to have a comfortable retirement.
• NEW OPPORTUNITIES: Deciding to try a new business venture or change industries.
• PEAK OF PROFITABILITY: Selling due to an upcoming decline in business.
• HEALTH & STRESS: Facing health challenges or feeling burnt out from work.
• DIVERSIFYING: Looking to invest and expand business portfolio.

Motivations & Approaches

Once you have come to terms with your “why”, it is time to start considering your selling motivations. Ask yourself:

• Are you willing to still be involved with your business post-sale?
• Are you looking to leave immediately after the sale?
• Are you looking to secure the highest possible price?
• What compromises are you willing to make?

Think about the most agreeable terms and conditions that benefit yourself, when selling your business. All of these questions need to be factored in when considering who will be buying your business. Try to align your financial and personal motivations with who you are considering as a prospective buyer.

Prospective buyers include:

Existing partners

Competitors

Outside individuals

Family members

Employees

Buyer Benefits 

Existing Partner – immediate sale & payoff, immediate departure, little disruption to clients/staff, may require ongoing involvement

Individual – immediate sale & payoff, strong selling price, no ongoing involvement required

B2B – strong selling price, immediate payoff, sale terms may require ongoing involvement

Goals and Objectives for your Exit Strategy

Based on your motivations and sales approach, develop goal statements and objectives for your exit strategy. Questions to consider:

• What are my motivations for selling?
• Who am I willing to sell my business to?
• How long are you willing to wait for a sale?
• What are my post-sale objectives for me and my business?

Develop a Goal Statement Using the Following Formula

Financial Objectives + Ideal Buyer + Time Frame + Post-Sale Objectives = Exit Strategy Goals

For example, a goal statement and objective for an exit strategy can look like this:

“I intend to sell my business for the highest possible price to an individual that has the financial and managerial capability to run my business. I would like to sell my business immediately within 6 months and have no involvement post-sale. I prefer to sell my business to a buyer that will retain employees and make no significant alterations to the business model.”

Each goal statement will vary depending on what is important for your specific exit strategy. Compromises to your goals and objectives may occur along the way but this exercise helps to generate a guideline to clearly define what you are expecting in a business sale.

STEP #2 – Preparing to Sell Your Business

Assessing The Situation

Before listing your business for sale, conduct an assessment to identify the strengths and weaknesses of your business and strive to amend any weaknesses to make your business more attractive.

Create a list of legal, financial and operational conditions. From there, assess the quality of these conditions and see where your business needs improvement.

A well-rounded business is more likely to be successful in attracting prospective buyers. Refer to the table below for your business assessment checklist:

Execute an Improvement Plan

Based on your business assessment, create and execute an improvement plan that will strengthen your business before sale.Consider the necessary steps required to improve your business and set a timeline for these improvements and invest in the resources.

Depending on the size of your business, on average it takes about 3 – 12 months to sell a business. This process includes preparing documentation, marketing your business, finding the right buyer and closing the sale.

Take time to improve your business because buyers will be assessing it from various perspectives such as legal, financial and operational. By executing an improvement plan you will create a strong vantage point for your negotiations.

As you strengthen your business for presentation to buyers, it is advised to keep your sale plans as quiet as possible. You should only share your sale intentions with staff members and consultants when necessary and should be followed with a non-disclosure agreement.

The reason why you want to keep your sale intentions quiet is because you risk creating uncertainty within the business, employees, clients, suppliers, etc. This uncertainty can devalue your business, while you try to improve and increase its worth.

Tips for an Effective Improvement Plan

Grow Your Profits
If you are planning on selling your business, it is wise to grow your profits as much as possible because your business worth is a multiple of its profit. Small businesses average about 2-3 times profit. Medium businesses are 3-5 times profit and large businesses can expect up to 5-10 times profit. The higher your profits, the more your is business worth.
Collect Your Documentation
Non-disclosure agreements, business plans, marketing plans, revenue/profit projections, financial statements (past 2-3 years), tax returns, leases, loan agreements, inventory, client contracts, insurance policies, product/service prices etc that are relevant to your business. Prospective buyers and advisors will be looking for this kind of information, so while you are executing your improvement plan, start collecting these documents to help prepare you for the sale.
Time is Money
Consider the amount of effort it takes to operate your business and also go through the business sale process. Are you prepared to continue operating, while actively looking to sell? Depending on your exit strategy goals, consider getting help from advisors.

Getting an Appraisal

After implementing an improvement plan, you will then want to determine the value of your business to make sure you don’t price it too high or too low. Find a business appraiser to provide a valuation of your business. You can get a professional valuation from local accounting firms, investment banking firms and business brokers.

Appraisers require formal documentation for the past 3-5 years such as: Business Plans, Tax Returns, Financial Projections, Legal Documents, Leases, Assets, Contracts, Agreements, Income Statements, etc. For best practice, make sure that the appraiser performing your valuation has access to the most current data regarding business transactions in your industry.

Finding the Right Advisors

When preparing your business for sale, it is important to assemble a strong team of advisors to help you navigate the sale process.

Advisors for selling a business include: business appraisers, accountants, lawyers, consultants and business brokers.

Every business sale requires a team of advisors, however the team members depend on the complexity of your business, your abilities and experience, as well as the amount of energy you are willing to devote to the sale process.

• BUSINESS APPRAISERS – Provides business valuation and determines reasonable selling prices.
• LAWYERS – Provides legal assistance during negotiations & necessary paperwork for the close.
• ACCOUNTANTS – Prepares financial documents necessary for business appraisals and prospective buyers.
• BUSINESS BROKERS – Assists in all stages of the purchase and sale of your business.

As a private seller, you would be responsible for all facets of the business selling process. Your team of advisors would consist of accountants, business appraisers and lawyers.

Selling your business privately allows you to save money. But operating a business and the selling process is a huge endeavor that requires a lot of time and energy.

Consider working with an experienced business broker because they manage the selling process and can connect you with existing potential buyers.

Advantages of Using a Business Broker

Industry Knowledge
Choose a broker that has experience in selling businesses in your industry. Every industry has a unique selling process, and by leveraging an experienced business broker you will accelerate the selling process. For instance, a business broker that sells dry cleaning businesses, may not know how to sell a restaurant with liquor licensing.
Marketing
Experienced business brokers have the knowledge in advertising and marketing your specific kind of business. Brokers can leverage different marketing channels that will yield the optimal volume of prospective buyers for you. Professional brokers should be able to advertise your business effectively and screen out the buyers for the business owner.
Time
There are many advisors involved in selling a business. Business brokers can save you time by coordinating with all the respective parties. They have experience dealing with appraisers, lawyers, accountants and buyers. While they take care of the business selling process, you can focus on improving your business to get the highest valuation possible.
Negotiation Power
Brokers are skilled negotiators educated on negotiating prices, terms, conditions and other aspects of the sale. Their job is to bring buyers, sellers and possible third parties, like landlords, together by mediating the transaction.
Protection
Business brokers are trained in legislation and the necessary paperwork in selling a business. Brokers will request the disclosure of a prospective buyer’s finances. This helps protect the seller by reducing the risk of prospective buyers defaulting on their finances. An experienced business broker will qualify the right buyers, which significantly reduces the chances of a business dealing falling apart.
Closing Fee
Business brokers charge a percentage of the sales price. This is called a success fee, which is based on a percentage of the closing price for your business sale. Although you have to pay the broker a commission, this is an incentive for them to sell your business as quickly and for the highest price possible.

Selling a Franchise

Due to the corporate system of a franchise, you have to go through the franchisor in order to sell your franchise business. Approach your franchisor and notify them of your intent to sell. Franchisors are accustomed to their franchisees exiting at some point.

Find out what assistance they can provide in the selling process, and if they are able to help you with a resale or transfer. The process varies significantly depending on what kind of franchise you own.

What are the Transfer Fees?

Check your franchise agreement for transfer fees. Some franchisors do not charge a transfer fee; others may charge transfer fees between $1,000 and $30,000.

What qualifications do Buyers Need?

Your franchisor must approve the buyer before you can sell your business. Qualifications usually relate to credit score, net worth and/or experience.

Rules of Thumb for Valuing a Franchise

Franchises normally share the basic rules of thumb in determining the sales price — i.e., what multiples of your gross revenue or cash flow you may be able sell your franchise for.

Will the Head Office Help Me Sell

Some Franchisors will take over the entire process and other franchisors do not want any involvement with the resale other than to approve the new franchisee. 

STEP #3 – Marketing Your Business for Sale

Confidentiality

In the business selling process, confidentiality is generally needed in order to reach your exit strategy goals. Giving away too much information can be detrimental in a number of ways:

Customers, suppliers and employees may become hesitant when a business is for sale. This can disrupt your current operations and therefore weaken your business valuation.

Prospective buyers may become hesitant about purchasing a business if they feel that too much sensitive information has been divulged to others.

Marketing with Confidentiality

Consider advertising by using blind ads and listings. Don’t share your business name until you’ve qualified prospective buyers and obtained their confidentiality agreements.

For example: PROFITABLE CONVENIENCE STORE FOR SALE GREAT LOCATION & ESTABLISHED CLIENTÈLE

Qualified buyers expect to be screened thoroughly before having sensitive information shared with them. Qualified buyers want to know that the business they are buying is carefully protected in terms of sensitive information.

Keep the conversation going and have patience through the business selling process. There may be a lot of back and forth with your prospective buyer, but make sure to release sensitive information only when you deem fit.

Give allowance for buyers to do their due diligence, as it can take them on average 30 – 90 days before making an offer. Continue exploring different prospects and always follow up.

STEP #4 – Negotiating with Buyers

Buyers want to acquire companies at the lowest possible price with the most favorable terms, while business owners aim to reap the rewards by maximizing the price and arranging for optimal seller terms. Despite the tension of these opposing goals, buyers and sellers share the same goal: to close the deal.

Tips on Negotiating with Buyers

• Request a Letter of Intent

Include a proposed purchase price, terms, conditions and warranties. This establishes a general framework for your negotiations on a final sale agreement.

• Consult with your Sale Advisors

Consult with your legal and accounting advisors to ensure that the sales agreement offers you the greatest financial benefit at the lowest tax liability.

• Never Settle for Just One Buyer

It is good to have a couple of prospective buyers so that you can start a bidding war, or just in case one of them falters.

• Have a Walk-Away Number ­­

This is the lowest amount you are willing to sell for. Crunch the numbers and do not be afraid to walk away if the buyer offers less. Sticking to your walk-away number can ensure that you are comfortable with the final deal.

• Cooperate with Due Diligence

Keep in contact with your buyer and create a plan for the due diligence process. Identify qualifying steps where sensitive information should become available.

• Ask Questions of Your Buyer ­­­

As a seller, do your due diligence and ask questions about their financial situation.

• Prepare Agreements in Writing

Potential buyers should sign a nondisclosure agreement to protect your business information.

STEP# 5 – Closing The Sale

After closing the sale, there is a transition period which typically involves a period of cooperation where the seller assists the buyer in transitioning the business. This typically includes introducing new owner to key clients, transitioning the financing and accounting, and answering questions on how to operate the business optimally.

About The Business Exchange

Established in 1998, The Business Exchange has over 20 years of experience specializing in lead generation in the franchise and business opportunity industry, in print and online.

We are a full-service advertising agency that connects business sellers to prospective buyers. Call us today at 1-877-337-1188 to learn more about our Businesses for Sale listings and Request a Quote!

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There are a number of factors that contribute to the success of buying and starting a restaurant. Even though many people have dreams of owning their restaurant, in order to be successful it will require a lot of patience and strategy. At the end of the day, owning a restaurant business and being able to operate it successfully may not be for everyone.

Questions to Ask Before Buying a Restaurant

Studies have shown that about 75% of restaurants fail in the restaurant industry, so why would this appeal to anyone who is thinking of buying an existing restaurant? People believe that a restaurant will give them the lifestyle they always dreamed of.

But before you take the leap of faith of becoming a restaurateur, ask yourself the following questions:

• Are you willing to work 7 days a week?
• Can you live for a year without earning a salary?
• Do you have the necessary funds to support yourself and your business for the first year?
• Are you a people person?
• Do you perform well under pressure?
• Are you the sort of person who will roll up your sleeves and wash dishes if need be?
• Is your small business fully equipped to open to the world?

Restaurant for Sale: What to Look for

Location, Location, Location

Like real estate, finding a prime location is extremely important. If your restaurant is located in an accessible and populated area, then the restaurant is likely to survive. The downside is that the competitors will run rampant in high traffic areas that are well-sought after. In contrast, if you buy a restaurant in a quiet neighborhood, it would be harder to survive.

Why do you think food courts do so well? It’s because they are located in malls, office buildings, highly populated areas.

Patience, patience, patience

Unless you are Gordon Ramsey or Jamie Oliver, your newly opened restaurant will likely not be packed and it will be hard to get a reservation for the first couple of months. Now is the time to learn how to persevere and believe in yourself and your business. It will most likely take more than a year for your restaurant to break even.

Detailed Business & Marketing Plans

A business plan will serve as a road map to guide your business and business decisions. Banks will want to see your business plan to obtain financing, and it will help you to govern your business when it comes to staff and inventory management. Remember a good business plan is fluid and can be changed as your business grows.

How to Buy a Restaurant in 5 Easy Steps

The procedures of buying a restaurant can be confusing and complicated, but it does not need to be, we’ve boiled down to 5 essential steps that will assist you with the process.

1. Check the Market for Restaurants for Sale

The first step in buying a restaurant is to see what restaurants are available. Restaurant listings will have a lot of useful information that will give you valuable insights into the choices you have.

Nevertheless, there is still important information you should look into when looking into buying a restaurant that you’re interested in.

1. Competitor Analysis: You conduct a competitor analysis to know what kind of restaurants are nearby. We recommend going in as a customer to scout out their décor, customer service and customer base, and of course the quality of their food. Needless to say, you only want to do a “competitor analysis” when it is a business that is similar to yours.
2. Cash Flow: If you’re buying a restaurant you will want to find financial data about the business and its profitability.
3. Platforms for Restaurant Listings: Another way you can dig more information about a restaurant is by looking at reliable and versatile platforms, that will showcase a list of restaurants for sale. Take the Business Exchange for example; we have 100s of restaurants for sale and restaurant franchises, to choose from.

2. Receive Funding from Banks or Third-party Lenders

Your credit will play a major role in receiving loans from banks. Obviously, if your credit rating is good, banks will be more likely to lend you money. If you fail to receive a loan from a bank because of your credit rating, then seek the help of third-party lenders.

3. Hire a Lawyer and Negotiate a Contract

After establishing your credit and have lined up your funds, you can negotiate with the owner to buy the restaurant. This is where you hire a lawyer that will prepare all the legal documents, help with negotiating a price, and inquire about all the assets and liabilities of the restaurants.

­­4. Create Transition Plans for the Restaurant

After you signed on the dotted line, you have officially acquired the restaurant, you can now brainstorm your transition plans. Usually, there are two types of transition plans a new restaurateur will implement:

Get to Know your Staff

Before your grand opening, now is a good time to get to know your new employees. Our advice is to be as transparent as you can because you want to have a good impression of your new staff. A staff that has been there for a while will be valuable to you because they can provide insights on clientele, foot traffic, and nearby competitors.

Transitioning Your New Restaurant

You will also need to create a transition plan for the business. This can include things like renovations, creating a new menu, or replacing old equipment.

5. The Grand Opening

The best time to promote your new restaurant is on the grand-opening day. This is the day where you will receive the most buzz, foot traffic, and awareness. A lot of experienced restaurant owners will give you the advice of extending special offers, promotions, and free food to patrons.

What other day are you going to do this other than the grand opening of your restaurant? This is also a great opportunity to know your neighbours and for them to know you.

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