There are many reasons for needing to sell your restaurant. You may be moving to a different country, or you may even be planning to use the money as capital to start a new kind of business. Regardless of the reason why you want to sell you restaurant, you’ll need to know how much your restaurant is worth before you put it up for sale.
Toronto Restaurant Brokers offers accurate restaurant valuations to help sellers determine the true worth of their respective restaurants. Our experienced and friendly brokers can easily help you with the following:
Prepare an Income Statement
It’s only natural that a buyer would be interested in a restaurant that is both profitable and popular. This is why you, as a seller, should have income statements prepared. Buyers will undoubtedly ask to see these statements before a deal is closed.
Approximate the Value of Your Assets
Consider each and every asset of your restaurant: the property, equipment, inventory, supplies, etc. The value of each asset of your restaurant can give you a good idea of how much your business is worth. For a more accurate value, take the total value of your assets and subtract the total value of your business’ liabilities.
Determine the Business’ Profitability
There are two basic ways to compute the profitability of your restaurant. We either apply a multiple to your business’ discretionary cash flow or apply a percentage to the annual gross revenue of your restaurant.
Discretionary cash is tied to the owner’s total benefit from owning the business—including the personal expenses an owner runs through the business, but are not part of the restaurant. This gauges how much a buyer will likely earn after purchase. Gross annual revenue, on the other hand, takes a look computes the average bottom line profit of a restaurant and checks if the restaurant is able to meet that average bottom line profit consistently.
Need Your Property Valuated?
Interested in learning how much your restaurant is worth? If so, do not hesitate to call us at 1 (416) 802-4228. You may also send us a message through our stephen.mariya@torontorestaurantbrokers.ca. We look forward to helping you become a successful restaurateur.
