- Try to analyse your business as objectively as possible
- Get organised and write down any business information useful to a buyer, e.g. systems and processes
- Find the right broker. Use a broker that you have confidence in and rapport with
Clare McCormick and Maurice Manno bought a small, 20 square metre juice bar in Flinders Lane in Melbourne's busy CBD, and two years later they sold Superfino, a successful gourmet food eatery and delicatessen.
Open for breakfast and lunch, Monday to Friday, Superfino had just 10 seats, but thrived on the takeaway element of their business with a staunchly loyal customer base.
'It was a lovely little business,' says Clare. 'We had a large, glass front window, with gold signage out the front. We used the delicatessen side of the business to create a wonderful atmosphere; the shelves were filled with beautiful products so there was always something aesthetically pleasing to look at.'
While both Clare and Maurice loved running their hectic little store, the sale was in the business plan right from the beginning. 'We were going to buy a business that wasn't working, do it up, build-up the business and then sell it,' says Clare. A little over a year after buying the business, when their little cafe was operating at its peak, they did just that.
Preparing the business for sale
After agreeing it was the right time to leave Superfino, the pair began their four-month journey to sell the business.
Their first step was to assess the business through the eyes of a potential buyer. 'We came in on a weekend when the business was closed, sat down at a table as customers and tried to look really objectively at what needed to be done.'By changing their perspective, Clare and Maurice were able to identify not only what needed to be physically improved, such as general wear and tear, but also the business' strengths and weaknesses.
They decided to capitalise on their strengths in visual merchandising to improve the business appeal. 'We bought in some really beautiful products that made the shop look great. It was all about creating the romance around our little cafe; making it look really attractive for potential buyers.'
They also decided to formalise their systems, creating written instructions about the business' day-to-day procedures such as opening and closing. 'We wrote down our procedures so that when someone new came in, we had already done all the hard work for them; they just had to follow the formula.'
In all, it took Clare and Maurice only a few weeks to prepare the business for sale, and they spent little over their normal running costs to make improvements.
The business sale process
Clare and Maurice appointed a business broker experienced in the sale of small hospitality businesses in Melbourne's CBD to manage the sale. 'He placed advertisements in the business section of the weekend papers and acted as a mediator between us and any potential buyers.'
Over the coming months, Clare and Maurice engaged with no fewer than 10 interested parties, some wishing only to walk through the business, others requesting a meeting to learn more.
'When talking to potential buyers, you need to be across every element of your business. They want to know things like how much coffee you sell, who your suppliers are, what your best selling products are and which products you make on site and which you buy in.'
'In the end, finding the right buyer for Superfino was as much about getting the best price for the business as it was about finding the right people to run it. We had great staff and loyal customers who loved our business and we wanted to make sure they were looked after'.
Just months after their sale process began, Superfino was sold to a working couple from Melbourne who had no experience in hospitality, but were looking for a lifestyle change. 'We were really happy with the sale in the end,' says Clare. 'The only thing we would do differently is to negotiate harder with our broker on the percentage they took and push them harder to secure the right sale for us.'