As with any other business, selling a fish and chip shop at the right price, and in a reasonable time frame, takes patience, preparation, and a tough, but fair-minded approach to negotiating with buyers.
If you’re to achieve those things you arguably need professional help. A business broker experienced in selling food service businesses can help you navigate each stage of the process – from preparing the business for sale, to finding buyers, overseeing negotiations and drawing up the contract of sale.
If you own a fish and chip shop, the chances are, you’ll be a hands-on operator who works long hours, including evenings and weekends. Do you really have the time and energy to spare, let along expertise, to manage the sale yourself?
It might be a false economy saving on broker fees, since doing it yourself might not get you the best price – or a sale at all.
Preparing your fish and chip shop for sale
Put your house on the market and you’ll want to make it as appealing as possible to buyers – and your fish and chip shop is no different.
This applies to getting your paperwork in order – related to accounts, the lease, taxes, payroll etc – and the condition of your premises. Of course, you should have your fish and chip shop running hygienically and efficiently anyway, but you might also consider upgrading or replacing ageing equipment and furnishings, provided the cost of doing so isn’t too prohibitive – first impressions count.
This could, for instance, involve refreshing the shop signage or serving counter or repainting the interior walls.
In terms of documentation, brokers increasingly digitise and store paperwork in the cloud, giving the buyer access to certain confidential documents at appropriate junctures.
Accessing and downloading paperwork through a web browser can save time and reduce the risk of documents being lost or mislaid.
Valuing your fish and chip shop
Your business broker should conduct a business valuation on your behalf. After all, you no doubt have neither the expertise nor the impartiality to do it yourself – vendors often overvalue their businesses (and never undervalue them).
Your adviser will take into account the value of the premises, and fixtures and fittings, and multiply net profits by a ratio appropriate for fish and chip shops, although it also varies based on factors like the lease length and location.
Finding buyers for your fish and chip shop
As with many purchases nowadays, most business buyers found their acquisition online.
If you want people to click on your business-for-sale prospectus, then you need to highlight the business’s strengths in areas that typically appeal to buyers. This might include things like ‘growing revenues’, ‘high footfall area’ or ‘award-winning fish and chip shop’.
However, resist the urge to exaggerate or outright fabricate information – this will only see the buyer walk away when they establish the true picture during due diligence.
However, as well as using sites like this to sell your business, your broker might know some businesspeople who are in the market for food service businesses within the locality. Also consider whether one of your employees, or even a local competitor, might have the desire and financial wherewithal to make an offer.
Negotiations and the business purchase agreement
After finding a buyer, it’s time to get down to negotiations.
The outcome, should discussions go well, will be heads of terms or letters of intent: non-binding terms and an agreed price pending the conclusion of due diligence.
Due diligence involves an extensive exploration of the business’s assets, financial history and potential. It also assesses market conditions and relevant information about the local area like demographics, competitors and any nearby developments – such as new housing – that might make the business more or less appealing
All being well, the buyer will then commit to a final, binding purchase of business agreement, although they may seek to renegotiate terms or even abandon the deal together depending on what the due diligence process uncovers.
Also, make sure you get consent from landlords or banks for the transfer of any leases related to the premises and equipment to new ownership as early as possible to avoid delays to the sale’s conclusion.
Finally, when it comes to researching the sales process further, it’s worth noting that the steps outlined for fish and chip shops here are broadly reflective of the steps involved in selling any kind of business.