When is the right time to sell an accommodation business?
No matter how successful your accommodation business, there may come a time when you decide to sell. Here’s everything you need to know about how to sell an accommodation business in Australia, and how to choose the right time for the perfect sale.
Is there a right time of year?
Like many industries, the tourism industry is seasonal. The peak season brings a wide variety of holidaymakers and travellers to your business. Some of these might see the appeal of what you do, and they might be inspired to start or run an accommodation business of their own. There could be some suitable potential buyers here.
However, these inexperienced buyers are not necessarily the best people to sell your business to. Your best buyers will usually be those who already have experience in the industry and understand the mechanics of operating an accommodation business. Just like you, these people will have more time and headspace to search for and purchase a business during off-peak periods, when they do not have to juggle so many day-to-day responsibilities.
Because of this, off-peak periods are often the best times for selling an accommodation business, but opportunities can come at any time of year.
Three reasons to sell
If you want to know how to sell an accommodation business fast, there are three main things to consider:
When your business is doing well, it is more valuable, so this is the time at which it is easiest to sell. If you wait until you have become disenchanted with the business, you might have let your profits fall, so the business’ worth will be reduced. At this point, you will need to attract a savvy buyer who can see the potential of your business and is prepared to put in the hard work to turn it around.
Cashing out when you have liquidity in your business is a smart idea. It is best to get your business into a financial position where you have equity to extract. Ideally, you should consider selling while the property still looks relatively fresh and new, so there is little work needed and no outstanding debts, giving you maximum equity in the business.
- The ideal buyer
If you are approached by a potential buyer, do not dismiss them without serious consideration, refer them to your Broker. Even if you don’t think you are ready to sell at present, you need to ask yourself how long you are likely to want to carry on running and owning the business. This buyer could be your ideal buyer, giving you the opportunity to re-evaluate your own plans. Remember, the first offer you receive is often the best.
Keeping your exit plan in mind
Whether you are or are not considering selling your accommodation business, the main thing is to keep a potential sale in your mind at all times. You can help yourself by looking for ideal sale indicators and also checking in with your business broker at regular intervals. They will be able to advise you further on how to sell an accommodation business, by offering market updates and buyer insights.
In addition, you can use these past articles of ours help you prepare a thorough “selling your accommodation business checklist”:
Don’t forget to get in touch with our team if you have any further questions or concerns.