Preparing your accommodation business for a fast sale
If you are planning to sell your accommodation business, you want the process to run as quickly and smoothly as possible. Here are some essential steps you need to take if you want to ensure a fast business sale.
Plan well in advance
A successful sale requires careful planning. It’s essential to start preparing as soon as possible once you have made the decision to sell your tourism business. This will give you time to put all the necessary steps in place to make your business an attractive prospect.
Change your mindset, make yourself redundant
As the owner of a successful hospitality business, you have most likely been at the centre of operations. Now that you are selling the business, you need to be confident that it can continue to run smoothly without you.
Forge clear ties with customers
Potential buyers want to see that your current customer base will be retained following the sale. This means you have to make an effort to forge clear ties with your customers before they know you are planning to sell.
Wherever possible, get your customers to sign long-term contracts or make repeat bookings in advance. This will demonstrate their faith in the business and give confidence to the new owner.
Excite and involve your top people
You will need to let your top management team know that you are selling the business so you can arrange a smooth transition. Help them to view this as an exciting opportunity by involving them as much as possible in the process. This way you can ensure there are no skills gaps and that the business can continue to run smoothly.
However, it is advisable not to let the rest of your employees know at this stage. It could cause uncertainty, which may lead them to look for other jobs elsewhere.
2. Get your house in order
Assess your business performance
To make your accommodation business as attractive as possible, you need to take a realistic look at all aspects of the business and see where there is room for improvement. If there are any obvious issues, no matter how big or small, you need to make sure these are resolved before you start approaching potential buyers.0
Consider cost efficiencies
Your business will need to appear as profitable as possible if you want a fast sale. You’ll want to look at areas where you can reduce spending and make savings. If the business has any assets which are unnecessary or under-used, now is the time to sell them.
Diversify your customer base
To future-proof your business and give it maximum protection against unpredictable market forces, you need to make your customer base as diverse as possible. Don’t rely too heavily on a small number of customers – make sure you are attracting a wide range of different clients as this will give your business greater security.
3. The numbers
Prepare your sales prospectus
Your sales prospectus is your most important marketing tool and it needs to showcase your business in its best light. It also needs to contain key factual information, such as the number of rooms to let, if there are apartments which the owners can occupy, and the projected turnover of the business.
Think about what your potential buyer is looking for
To get your marketing right, look at the business through the eyes of the buyer. Remember what made you buy the business in the first place. What attracted you to it? What questions did you want to ask? What were your concerns? You can create a successful marketing plan by addressing these points.
Consider internal and external factors that can maximise value
Your staff are your biggest asset. In order to optimise this asset, make sure all employees are clear about their roles and responsibilities. It’s also important that they are aligned on brand messaging so the new owner can inherit an efficient, united team.
You can also maximise the value of your business by highlighting the attractions of the surrounding area, and why it is an ideal location for a tourism business.
4. Get help
Form a trusted team of advisers early
You will need a team of expert professionals to give you the help and support you need. Your team will include your accountant and solicitor, as well as a reputable business broker. Your sale will go more quickly and smoothly if you use a business brokerage as they have valuable inside industry knowledge and contacts.
Develop sound financial projections
You need to present your business as profitable with plenty of opportunities for growth, but this needs to be based on factual information. You will usually need to show your accounts for the last three years. You can use these to produce realistic financial projections, backed up with as much detail as possible.
Produce a sale plan
A successful sale is not just about what you’re selling, but how you plan to sell it. It is important to think strategically so all the essential elements (an efficient staff team, positive financial projections, and the infrastructure you need) can come together at the right time.
Keep perceived value and buyer interest high
It is important to stress to potential buyers that they need to act quickly as this is too good an opportunity to miss. Injecting a sense of urgency into the process will prevent it from becoming too drawn-out and “deal fatigue” from setting in.
If you are selling an accommodation business and you would like to enlist a reliable and experienced business broker, or you want to know more about making a fast business sale, please contact us for more information.