11 Steps to selling your accommodation business
Travel-based accommodation venues like Caravan Parks, Backpackers, Motels, Hotels and Holiday Resorts are in high demand across Australia.
To ensure you receive the best price when selling your accommodation business and have a smooth experience from beginning to end, follow our recommended steps.
PHASE 1: PLAN
Step 1. Understand the value of your accommodation business
Researching similar properties in your area will give you a rough indication of what your accommodation business is worth. But engaging an accommodation business broker early will help identify any strategic improvements that could have a significant uplift to your sales price.
Step 2. Decide who will represent your sale
There are some key professionals you will need to engage to help you sell your accommodation business;
– Business Broker
Selling an accommodation business through a business broker is less stressful than doing it on your own. Your broker will be able to provide up-to-date insights and advice and have access to the right connections to ensure a faster, smoother sale.
PHASE 2. PREPARE
Step 3. Prepare your business documentation
To attract and secure the right buyer, you will need evidence of how your business has performed financially in recent years. Generally, three years of financial data will be expected, so get your accounts in order as early as you can.
Step 4. Create a marketing prospectus
This information pack includes vital information about your accommodation business, including the number of rooms for lease, apartments available for owners to occupy, the location and nearby amenities, building up to the expected annual turnover and future growth potential. Your Broker will assist with this.
PHASE 3. PITCH
Step 5. Promote your business to potential buyers
Marketing a Caravan Park, Backpacker, Motel, Hotel or Holiday Resort requires listing it on all the major online websites where business buyers do their research. Your broker will also have an extensive database of active buyers waiting for new properties, such as yours, to be listed.
Step 6. Review offers
On the advice of your accommodation business broker, you will be able to evaluate each offer on its merits and decide whether it will help you reach your own personal goals. Your business broker will also suggest negotiation tactics that draw out a better deal or better price for you.
PHASE 4. PROCURE
Step 7. Buyer due diligence
Your broker will run background checks on potential buyers once you’ve reached a principal agreement. You’ll want to confirm that they’re in a strong financial position to purchase your accommodation business and have the expertise to manage the property.
Step 8. Prepare a legal contract and purchase agreement
Your broker can recommend solicitors that have worked with hospitality or accommodation business previously. Your legal advisor will help draw up terms and conditions that support a successful transition of both the property and business ownership between both parties.
Step 9. Finalise negotiations
Closing the deal is best left to the professionals – business brokers – who not only understand the regulations and requirements around selling an accommodation business but can act as an intermediary between you are your prospective purchaser, ultimately securing a deal in your favour.
Phase 5. PROCEED
Step 10. Provide handover and training
When you sell an accommodation business, you not only need to change the ownership records but all business related licences and permits. As part of your negotiations, you may offer to train the incoming owners on all aspects of running the business and support them for 1 to 2 months.
Step 11. After the sale
While you are working through the process of selling your accommodation business, it’s a good idea to talk to your business broker about your future goals.
Our team at Accommodation Business Brokers have experience owning, running and selling accommodation business’s plus we’ve helped many people transition to the next chapter in their lives.
We’re great advisors and confidants, not only business brokers!