Always run your restaurants like you are planning to sell them.
When someone sells their house, they prepare it to appeal to buyers.
They touch up chipping paint, clean stains off the hardwood floors, and plant the nicest flowers in the front yard.
That cracked toilet in the third bathroom nobody ever uses? Replaced.
The result? Their house has never looked better – and buyers flock to it.
Unfortunately, it also means they’ve probably never enjoyed their house more than right when they’re about to sell it!
How does this apply to you as an owner of an independent restaurant company?
Maximize Your Asset to Keep or Sell
If you ever look at your restaurants and find yourself saying, “Let’s get it ready to sell,” that just shows you’ve been leaving a big pile of money on the table for years.
Living with flaws in your restaurants costs you a lot: not just money out of your pocket, but also reduced experiences for your guests and employees, every day.
My best clients use this filter to direct their behavior.
They think about initiatives that will make their brand and asset highly sellable, even if they have a vision of their great-grandchildren eventually being owners.
Conversely, I know a group that was so happy with what they were making, they refused to take cost management seriously, and never realized 2 points on their bottom line times a multiple of when they sold.
It cost them over a million dollars!
Three Seller Scenarios
- Not the right senior management. You have to stay on as a consultant to your buyer for six to 12 miserably long months because they cannot run it without you.
- Not enough targeted effort. Your buyer immediately improves results substantially. They want you out of there 30 seconds after closing so they can start implementing improvements and increasing the value you did not realize in the sale.
- Just right (but not a fairy tale). You walk away at closing. Your key leader stays on to orchestrate the transition and see if they mesh with new ownership. You go to the beach.
Every successful owner of a multi-unit restaurant group, like the ones I work with every day, wants to be in scenario 3, whether they operate or sell.
If they can’t claim to be there, we work together to arrive at that destination.
Over to you. Can you identify your restaurant equivalent of chipped paint, stained hardwoods, empty flower beds, and the cracked toilet? What action would maximize the value of your asset and the amount of your cash flow?