Selling a Bowling Alley? Get These Documents in Order

Industry demand for bowling centers has finally risen! After a sluggish growth, based on a decline in leisure activity, this popular past-time is finally stabilizing across the United States. Bowling businesses generated over $4 billion in 2019 alone. For current owners who’ve considered selling, this could be a great opportunity to finally part with your bowling alley. Business buyers are more likely to be enticed to buy a bowling center after a consistent growth in disposable income and social activities. Continue reading as we go more in-depth about the material you need to prepare when selling a bowling alley.

A Business Owner’s Checklist for Selling a Bowling Alley

It’s common for small business owners to feel overwhelmed with the selling process. But, with the right documentation, listing your bowling business for sale can be less stressful than you might imagine.

1. Real Estate Leases/Titles

Some owners choose to rent a bowling alley space from a property manager, whereas others own the facility itself. Potential buyers may be more swayed by bowling businesses with real estate included. If the space is leased, you’ll want to determine parameters for transferring ownership. In either scenario, you’ll want to prepare the respective documents of your real estate agreement.

2. Financial Information

Business owners set asking prices based on an assembly of financial information, from cash flow/seller discretionary earnings to market trends and ratios. Interested buyers will want to see how you landed on this figure. Entertainment centers should have a balance sheet, income sheet, and cash flow statement on-hand. You may also want to prepare a personal financial statement for your buyer. If you plan to offer seller financing, it’s recommended you work with a business broker to communicate and distribute this information accurately.

3. Supplier and Distributor Contracts

Bowling alleys typically work with equipment distributors, maintenance providers, and food and beverage suppliers. Buyers prefer business opportunities that have an existing relationship with key partners. It’s even more beneficial if these contracts can stay in effect after the transition.

4. Employee Agreements

The average bowling center has several employees dedicated to assisting customers with bowling lane rentals. You probably also have a few maintenance staff for general upkeep on pinsetters, scoring systems, bowling balls, bowling lanes, and other mechanical components. You should condense your staffing list to an easy-to-read folder with hire dates, salaries, and employee agreements (if applicable).

5. Business Formation Documents, Licenses, Insurance Policies, etc.

In the bowling industry, it’s customary to acquire various state and local permits, in addition to a general business license. These documents prove you’ve legally registered your bowling business within your state. As most bowling alleys sell alcoholic beverages, you’ll want to show proof of your liquor license. Your city ordinances may require you to take additional steps to legally form a business, such as insurance policies, so it’s best to check with a local representative.

6. Asset Lists

The most popular bowling alleys tend to offer more than just bowling pins, balls, and lanes. Most also double as family entertainment centers, with arcade games, event spaces for birthday parties, laser tag, and other fun activities for bowlers. You’ll want to prepare a list of all tangible and intangible assets, as well as one for movable fixtures, furnishings, and equipment. This documentation should include value details and depreciation schedules, where applicable. If your bowling entertainment center has a good blend of amenities, you may have other inventory that you should account for.

This checklist is by no means inclusive of all the documentation you’ll need to prepare in anticipation of a sale. Some of the more general items you’ll want to consider are organizational charts, loan agreements, service descriptions, and employee policy manuals. Preparing for a successful business transaction means taking into consideration any details that could be of use to a new owner.

Let Sunbelt Business Brokers guide you through this transition! Locate your nearest office for professional representation selling your bowling business.