Tips for Success When Buying a Banquet Hall

With the event planning business on the rise, the demand for places to host events has remained on a steady incline. From weddings and business conferences to family reunions and more, banquet halls are a staple for a variety of events. If you’re interested in buying a banquet hall, consider the following tips from the experts at Sunbelt Business Brokers to help you land a successful deal.

6 Questions to Ask When Buying a Banquet Hall

Before placing an offer on a banquet hall and its associated real estate, answer the questions below to be sure the business is a wise investment.

1. How profitable is the banquet hall?

Before taking over the reins of a banquet hall, do your research to ensure it’s already a successful business. Currently, the event planning industry generates about $6 billion in revenuey. With a strong demand for event planning services, banquet hall owners should expect to see the same success in their businesses, too.

2. How does the banquet hall compare to others?

While most banquet halls are similar by nature, there are a few key ways one might stand out. Ask the following questions to determine how the hall stacks up against competitors.

• Does the hall have close relationships with small businesses nearby such as caterers, restaurants, or florists?
• Has the banquet hall recently invested in new furnishings?
• Has the banquet hall hired an interior designer to create a welcoming look?
• Does the business focus on one type of event such as weddings?
• Does the facility specialize in a particular type of special event, such as weddings, corporate events, or baby showers?
• What types of packages does the venue offer clients? Can you think of ways to add value to clients?

Although the role of a banquet hall or party center is to provide a great event venue, efforts to stand out amongst competitors can significantly impact the success of the business.

3. Why is the current owner selling?

Never forget to ask the current business owner their reasoning for exiting the business. Common reasons for exiting a banquet hall business include retirement, new opportunities, burnout, or relocating. If the owner answers your question with a similar reason, the business’ performance is most likely not a cause for concern.

However, if the owner credits poor business or financial reasons, it could be a sign that the business is suffering and perhaps not a wise investment. While a new business owner can often be the solution to turning a failing business around, it’s important you weigh your options realistically and do further research before moving forward with your purchasing plans.

4. Are any furnishings or equipment included in the sale?

Running a successful banquet hall requires lots of resources. From seating and place settings to dance floors and building maintenance equipment, costs can add up quickly. Determine whether the owner is planning on including any furnishings or supplies in the sale to help you determine the true value of the business.

5. What are the average costs of running a banquet hall?

Though much of the financial burden of event planning falls on the customer, it’s important you have an idea of how much it costs to maintain the banquet hall. Consider asking the current owner for financial details to get the most accurate estimate. Getting information about past utility bills, employee salaries, insurance, and taxes will help you determine a likely operating cost.

6. What is the asking price for the banquet hall?

If the business appears to be a wise investment, be sure to look into the owner’s asking price. Inquire how he or she arrived at the valuation and if they enlisted the help of a business broker. If an owner arrived at the asking price with the assistance of a professional, it’s more likely the price is firm and there’s little room for negotiating a different price.

If you’ve decided to invest in an event space or reception hall near you, consider browsing banquet halls for sale with Sunbelt Business Brokers! Our brokers are ready to help you close the perfect deal. To find a Sunbelt broker, browse our offices.