10 Things To Consider When Selling Your Business

Maralytics Blogs 10 Things To Consider When Selling Your Business

By Graeme Alexander of Lightspeed

All up, I owned my own cafe for just over four years before I sold it.

When I opened it with my wife it was the culmination of our dream to be that sickly-sweet husband & wife neighbourhood operation. You know the type. It was going to be a place where everyone was happy and our impeccable family lifestyle oozed effortlessly into our workplace and covered anyone who came near with its wholesome charm.

But, like the Hallmark moment outlined above, it was a fairytale.

Sure, there were some days where we were in a good place and the vibe approached something resembling wholesome, or idyllic, but the reality was harsh, lurking in the corner like a ghost and ready to terrify us at a moment’s notice.

It was a time in my life when nothing was certain and the ending was never in sight.

It’s with this in mind that I’ve put together a list of things I learned as I navigated the sale of my cafe that could have given me some much-needed reassurance in one of the most difficult periods I’ve ever been through.

1. Know when to let go

This is probably the most difficult time.

It’s here where you’re beginning to realise that maybe doing this for the rest of your life isn’t all it was cracked up to be.

For me, it was the birth of my son.

After that, nothing came close. 

Where I used to spend every waking hour devouring cookbooks, cooking shows, food blogs, anything really in the pursuit of making my cafe the best it could be, once I became a dad my priorities shifted so dramatically that I lost almost all interest in learning about food. There was only him.

With my neglect came the inevitable drop in standards and I had a harsh realisation to accept that my heart wasn’t in this thing anymore and I should probably start exploring my options.

And it’s all about acknowledging those feelings that maybe things are coming to a close that whilst hard to accept, are coming from a place of truth.

2. Have a plan

Once I’d confided in my wife that I didn’t want to carry on with our cafe, we got down to deciding what exactly we were going to do.

In reality, we had too much money invested in our business to take the hit and just close, so selling it was the only option. However, if you do decide to close up, you can make quite a bit of money selling your fit out, but that means navigating a daunting online marketplace: something I would never be game to do due to a mixture of anxiety and laziness in equal parts.

We asked around and did some research and the findings were a little bleak. A few of our friends had recently gotten out of the ownership game, only they’d lost almost everything to do it, either via closing up, or selling their share to their partners.

Thankfully, we were still doing well enough that our cafe was an attractive asset to any prospective buyer, so we enlisted the help of an agent to sell up.

If you’re looking to sell the business, shop around and find a good agent to help you. They know the market better than you do and they’ll (hopefully) be able to get you not only the best price, but also a much smoother sale.

If you’re leaning more towards a closure, do some research about what your equipment is worth and begin setting up a store on eBay, Gumtree, or Facebook Marketplace.

3. Read your contracts

This is where I messed up, big time.

My agent was also my friend, and he told us that our charming little cafe would fetch a certain amount in the current market (I won’t go into how much because I’m a gentleman, but it was more money than I’d ever dreamed about having).

It was with this excitement in mind (and the fact that I was dealing with an old friend) that I skimmed the finer details of the contract and signed away like the idiot that I often am.

When we finally sold, the market had cooled a little, as had my patience, so I had accepted an offer of just over half the original value. I had also thought that my friend’s commission was a percentage when I did this. It was not. It was a flat rate that took up a lot of my profit.

Should’ve read the contract has been my mantra ever since.

Thankfully, I had read the contract for my equipment, and my lease so I knew exactly what I owned and could include in the sale to boost the price.

Check all of your contracts to see how much notice you need to give on your building’s lease, whether there’s a fee to end it, whether there are any buyout fees for leased equipment, and of course, how much commission you’ll be paying to your agent.

And definitely get ready to marvel at how people as unfathomably intelligent as lawyers can also be amongst the most frustratingly. Consider yourself warned.

4. Talk to your staff

Once you make the decision to sell, tell your team as soon as possible.

People are going to talk, so it’s best that your staff hear any information from you directly. 

And it might be that after they learn about the sale they want to move on, and you should do everything in your power to help them. Give them a great reference, ask around to see if any of your friend’s places are hiring. Basically, champion them.

5. Talk to your customers

Same as your staff, letting them know first can keep the rumour mill to a minimum and keep their trust.

Everybody loves a good gossip once in a while, now’s your time to control what they’re saying whilst also strengthening the bond between you and your customers. It could come in handy if you choose to continue in hospo once the sale goes through.

6. Talk to your loved ones

Selling a business is stressful. You might not be the best company whilst it’s going on, and your loved ones are on the front lines, so talk to them.

Let them know what you’re going through, if only to vent a little or talk it all out.

If anything, let them know that no matter what, they’re not the ones who are getting you down, and apologise in advance for how quiet you’re about to get (that is, if you’re anything like me).

7. Delegate the delegatable

Why was I so quiet? Because bureaucracy makes my eyes cross and I was so entrenched in the stuff that I could barely function.

So, what did I do? I emptied my plate a little, that’s what.

I enlisted some help to sort out my DA nightmare, and I talked to my accountant about the financial stuff. Any cosmetic touch ups that were needed were done by trained (I hope) professionals from Airtasker, leaving me with the day-to-day running of the operation.

Honestly, there were so many balls in the air that I was beginning to have second thoughts, and you might too. 

Stay strong, and remember why you’re doing this in the first place.

8. Sever your ties

The day you’ve been waiting for is finally here: the sale is done and the keys are no longer yours.

Now, there’ll be an urge to go in and enjoy a coffee in your old haunt. Resist this urge with every fibre of your being.

You’ve just spent the most stressful period of your life in and around the place, and the new owners probably don’t want the O.G. sitting down and watching (judging) everything they’re doing.

Plus, the customers will be confused about why you gave them such a heartfelt goodbye the days before when you knew you’d just end up back there on Monday morning.

Nothing good can come of this, trust me.

9. Take a Break

If you can, take a break from everything.

Use some of your sale profits to treat yourself and your loved ones to a trip away.

If you are going right back to work, your new-found status of ‘former owner’ could afford you a little leeway in your starting date, lest your new employer misses out on the ever-rarer ‘all-rounder’ that you are now considered.

Have a breather and take some time to not think about hospo for a bit; it’ll be like Red Bull for your soul.

10. Look to your future

Once you’re rested and revitalised, you can start planning your next move.

Now, some absolute maniacs dive right back in and open up (or buy) another business, and if that’s what you want to do then there’s not many better times to do it. You have the money (probably), you’ll still know the industry, and you’re now armed with enough knowledge of what works (and what doesn’t) that your likelihood of success is far greater than last time.

If you’re like me however, you’ll crave the security that being an employee brings, and look to leverage that ‘all-rounder’ status to its maximum potential. Get a job as a cook, and start falling in love with food again. Or bask in nostalgia as you become a full-time barista, pulling shots and pouring milk on auto pilot next to a bunch of teenage workmates.

Do whatever it was that you craved when you were an owner; you’ll be surprised how far a little stress-free happiness can go.

Whatever you choose to do, know that Lightspeed is there to help every step of the way. Either as your chosen POS, or as your resource for industry knowledge.

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