If you have turned where you live into a thriving bed and breakfast, it may be a daunting task to sell up. Staying objective while selling any business is difficult but with a guest house or B&B can be even more so.
In South Africa, though, there is room for growth in tourism and eager buyers could be looking to take advantage of this. Earning an income off your property is also a very appealing option for potential buyers.
Read on to discover some tips to help you through the selling process!
Running a business that is on the same premises as where you live can lead to the overlapping of personal and business finances. You will, therefore, need to separate these and get your books ready to withstand due diligence from a buyer.
Buyers will want to see specifically what the business costs and profits are so that they can make an objective decision on whether it will be profitable for them.
Be very careful about recording the number of covers that stay with you and at what time of year they are there. If you are able to attract guests out of season, your business will be of even more value. Consider ways that you can attract guests in the offseason.
Partnering with other local businesses to offer customers a unique experience is a great way to do this. You could also offer special deals or create events that could draw people to your establishment.
Simply identifying these potential projects and sharing them with buyers will give them an idea of how they can expand the business and increase sales. This will create value in their eyes.
You will also need to focus on the things in your business that will add to the final sale price. General maintenance should be done, walls painted, new bedding bought and anything else that will improve the appearance of the business.
Value and timing
You will need to be clear about what it is that is included in the sale of the business. What assets are going to be sold with the business and what will remain yours?
There is no doubt, with all the preparations that are necessary, that you will need to start preparing for the sale of your business a few years before the sale happens. If you want the sale to go well, it’s best to give yourself the time to do it properly.
Finding the best buyer
Passing on your guest house or B&B can be an emotional process. So, it may be more important to you than with other business owners that you find the right buyer to take over your legacy.
Marketing your business online can be a good way to reach a large audience. You can also advertise locally as there may be people in your area that are familiar with your business and keen to take it over.
Specialised channels for B&Bs and Guesthouses are also a good place to market the sale of your business.
Dealing with a first-time buyer can be a process that has some hiccups as you both navigate the sale. However, they may be more likely to have the same passion and vision for the business as you did when you started it.
You should also always be clear with potential buyers as to the reason for the sale. A buyer will want to know that the reason you’re selling so that they can make an assessment as to the risk of their investment.
If you still want more information on how to sell your business, take a look at our selling guides!