Selling A Business
5 Steps to Take Before You Sell a Bakery
You’ve put in a lot of hard work to build your bakery, and now it’s time to move on and reap the rewards. No matter why you’re selling your bakery, whether it’s because you are prepared to retire or move on to a new business venture, the work it takes to sell a bakery can be overwhelming.
However, several factors can ensure the success of a bakery sale.
Selling Your Bakery in 5 Steps
According to IBISWorld, the retail bakery industry’s revenue has increased by a whopping $11.1 billion annually since 2015. Although taking a slight hit from COVID-19 in 2020, takeaway and delivery options have helped those in the food industry increase their earnings.
To successfully sell your bakery business for top dollar and in optimal time, utilize the following steps.
1. Prepare for a Smooth Exit
When you begin selling a bakery, the first thing you need to do is develop an exit strategy that details how you, the small business owner, will depart from the business.
Take these questions into consideration while you plan, as potential buyers will want to know that the bakery will continue to drive towards success without you at the wheel.
- When do you plan on exiting your baking business? Immediately or after a predetermined time?
- Will current employees remain with the bakery after the sale? Can your current managers operate without your presence? If so, does paperwork need to be drawn up to ensure job security for your storefront employees when new ownership arrives?
- How do you anticipate your baked goods distributors will react to your exit? Is there anything that you can do to improve those relationships for the new owner?
- How will the transfer of ownership take place?
You can avoid running into issues that will complicate or potentially terminate the sale by addressing these questions in your exit strategy.
2. Compile Your Financials
The next crucial step when selling your bakery is getting all your paperwork in order. Potential buyers will want to see records of everything from tax statements to inventoried bakery items to contracts, cash flow, and more. Consider working with an accountant or small business lawyer to help you organize all your financial and legal documents.
3. Request a Valuation for Your Bakery
It is crucial to have a proper business valuation or Broker Opinion of Value to calculate the value of your bakery business. Occasionally, owners form an emotional attachment towards their business, which can cloud their judgment when setting a fair sale price. Receiving a professional business valuation from an impartial group is the best way to reach a reasonable sale price for both parties.
You can take many different approaches to calculate how much a business is worth, and things can get complicated. When it comes to getting a valuation, it is best to play it safe and leave it to the professionals.
4. Find Ways to Improve
Your bakery must be in the best shape possible before you list it for sale. Pinpoint aspects of your small business that you could improve and commit to a plan of action. Any weaknesses in your daily operations, social media strategy, pricing, or storefront that a potential buyer could detect must improve before listing.
Consider offering takeaway or partnering with foodservice platforms like DoorDash and UberEats, if you haven’t already. COVID-19 has changed the way people interact with businesses in the foodservice industry, and that likely isn’t going away anytime soon.
Another way to improve your bakery and make it more attractive to buyers is to grow and diversify your customer base. The stronger your bakery sales are, the more attractive your shop will be to potential buyers. Identify untapped markets in your area and brainstorm ways to appeal to them, thus increasing the foot traffic of your storefront. One such idea is to offer a broader range of baked goods like vegan or gluten-free cupcakes, brownies, and bagels!
5. Finally, List Your Bakery for Sale or Hire a Broker
Are you ready to bring your business to market? If you are considering listing your business for sale, look into paid advertising or listing websites.
Or, to simplify the process, hire a professional broker. Business brokers have the proper experience to market your bakery successfully. They take care of the grunt work during the selling process, like finding high-quality buyers and marketing the sale of your bakery business. At the same time, you maintain full-time, day-to-day operations and revenue.
If you’ve reached the final step of listing your bakery for sale, consider choosing the assistance of Sunbelt Business Brokers. Our years of experience linking buyers and sellers allow you to rest assured knowing our business brokers will get you the most bang for your buck.
Plus, working with a professional business broker ensures you don’t miss a single thing in the sales process. Contact a Sunbelt office near you to get started selling your bakery today!