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Bed and Breakfasts for Sale | Seller Resources | Latest News | Sitemap |
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Bed & Breakfast For Sale - Seller ResourcesPrior to advertising your bed and breakfast for sale, there are many things that need to be taken into consideration . . . |
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Planning Ahead for Bed and Breakfast Sellers
Reaping the benefits of the business that you have created is a reward for sellers, especially after the many long years invested. However, there are a few things that need to be considered in order to maximize the amount of that reward when it comes time to leave the business. Most Bed and Breakfast property sellers interviewed have a high level of burnout. This burnout syndrome largely affects the sale. In most cases, a seller does not continue to put in the time and work necessary to grow the business when he or she is feeling bound or tired. This results in declining sales prior to and during the marketing. When an average marketing time of nine to eighteen months is factored in, the sale and potential profit may suffer. There are typically two ways to finance the sale of a bed and breakfast, through the owner or through the bank. Both require a substantial amount of financial issues to be resolved. If a buyer is going to the bank to secure financing the bank requires at least three years financial record of the business. This raises a number of issues for sellers. Keep the business growingSales history is the most important factor. Declining sales during the marketing process means declining offers on the property. Buyers will not pay more for a business that is in decline, in addition, banks will not favorable to a business that is not showing growth. Banks are looking for businesses that will support themselves and the new owners. If a bed and breakfast is not making enough to pay the utilities, an owner's salary, and a mortgage on the property; neither banks, nor buyers will be as willing to pay a higher price for the property. It is a fact that a business that cannot pay for itself and support a new owner is not a viable option for buyers and banks.Accounting is the keyFinancial accounting is another important aspect that will help or harm a sale. Be sure to get professional advice on accounting prior to selling. Many accountants can help with deductions and expenses that do not take away from the viability of the business. It cannot be stressed enough to have proper accounting, record keeping and (it should be understood, but) claiming of all income. Representation of income without having the record of it on a return can cause many problems, the least of which is a skeptical buyer. The best way that a seller can prepare for a sale is to continue with their business plan and include preparation and planning for selling the business. This way all decisions will be viewed with the long-term goal of maximizing the profit from the sale of the property. Most sellers have an idea when they plan to get out of the business, but do not plan accordingly. By working a tentative sales date into the business plan, it will help keep the sales up and possibly increase the value during the marketing of the property. This will make the sale more attractive to a buyer and ease the stress on the seller. By recognizing the early signs of burnout, or by planning a date to leave the business, the seller can prevent the stress of working a business when they no longer have a desire or the patience. This is especially helpful considering the longer marketing times that bed and breakfasts typically have.A Business Plan to leave the businessThe ideal time to call in a bed and breakfast marketing specialist would be two years prior to your target "leave the business" date. The first few months the specialist can evaluate the business, gather marketing materials, check local zoning and regulations and make initial contacts with buyers. The last 18 months would be the actual marketing time for the business. The sale may come sooner than that, and closings are typically 2-3 months after a contract is written.A small amount of planning will help sellers maximize a return on their investment and reduce stress from working the business while burnt out. Be sure to contact professionals for their advice and recommendations at least 2-3 years prior to your ideal date of leaving the business. Practicing these common-sense ideas and keeping to the business plan that started your business will help any seller to leave the business happily and content with the success they have achieved. |
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