Exactly why is now the best time to sell a restaurant? For the nearly twenty years that Sofranko Advisory Group has been marketing businesses, the beginning of the year signals an uptick in buyer interest.
Reason 1 – It’s the Economy….
The economy, despite a recently announced rise in interest rates is still pumping out the strongest GDP (Gross Domestic Product) in years. The real GDP growth in second quarter was 4.2 percent, something unseen in a decade. With this economic news, combined with a strong labor market and record unemployment, those working a job feel comfortable taking a risk. If they step outside their current corporate comfort zone and paycheck to buy a restaurant, the market is always good enough to return. That gives them more security to take the chance on a new venture. That’s reason one that January will be a great month to sell a restaurant.
Reason 2 – Restaurants are Worth more
Year end numbers are in and 2018 was much better for most restaurant sellers than 2017. For that reason, the value of the restaurant you want to sell has increased over the prior year. This is based on national results published by Black Box Intelligence data. “Same-store sales were up 1 percent in November, which became the sixth consecutive month of positive sales growth for the industry. Excluding a very small dip in same-store sales during May, every month since March has posted positive same-store sales growth. This represents a period of expansion not experienced by the industry in over three years.” When sales go up, earnings go up, particularly after a tough 2017. If you want to know what your restaurant is worth in today’s market, now’s the time to find out.
Reason 3 – Lenders are Ready to Go
Lending is at a level unmatched in this SAG’s history. Multiple banks are making more than one offer on the same deal. With rates inching up, based on the latest Federal Reserve hike, money is still cheap but more importantly, it is readily available. Someone in the market to sell a restaurant, no longer must worry about holding a note on the deal. He or she can expect a payout, in most instances, at the closing table if the books and records are strong and sometimes, even when they aren’t.
If you want to sell a restaurant today, be ready for the market to continue to be hot. Buyers only must bring between ten and twenty percent to the table to get a loan in today’s very favorable loan market.
If you are ready to sell contact me at 412-692-1031.