My family has a BBQ restaurant. We are open tues through sat 11-8 we seat 60. We are primarily self serve like subway would be. 4 people on staff is a full staff.

We've started doing concessions and should gross roughly 12k this year on it.

Restaurant itself should gross 225-250 this year. We are in a town of 20,000 and 3/4 mile off interstate beside Walgreens.

The restaurant has been open since July 2012. How do I go about selling it and how do I value it? I've never done anything like this. Are there companies that do this?

Consult a real estate broker that specializes in businesses.

Consult a business broker, not some real estate guy that sidelines in businesses unless you are rural then you wont have a choice.

Now for a VERY VERY vague guess on value based on MY AREA  and the areas ive lived/bought or seen businesses for sale:

(Value of real estate if owned) + (value of furniture, fixtures, and equipment) + ( 1 to 2 years of profit before taxes).

When you figure profit before taxes make sure you are paying yourself a fair market wage. Ive seen some for sale that claimed 80k in profit but they werent paying themselves so their profit was more like 10 or 20.

Thats from the sellers viewpoint.

What offer to expect from a smart buyer:

(Value of real estate) + (75 percent of used value on ffe) + ( 0 to 1 years worth of profit before taxes).

discounted cash flow, profits over a 10 year period less the cost of capital discounted to present value

The correct answer is consult a business broker, as a rule of thumb stay away from real estate brokers unless the transaction is mainly real estate.  A good business broker who's done several restaurant transactions in the area will have a good pulse on the local market and should help you understand value and what to expect.  Having a discussion with a couple of them will at least be helpful to you to if nothing more than to provide insight.

Couple issues I see off the bat:
-Opened less than three years, I have two full years of financial statements to look at.  As a buyer how much am I really willing to pay for an unproven business?
-What's operational cash flow?  Can I purchase the real estate and business, cover my debt service, and still have money left over to live off of assuming I have to work in the business if I buy it?
-Every buyer will ask, "Why are you selling your business?"

I'll tell you what I tell every business owner, your business is only worth what the market will pay for it.  The poster above me recommended the RE value + 1 yr CF + FFE.  That's probably a fair gauge.  A broker might tell you 2x cash flow as well.  In the end you'll have to go by what somebody is willing to pay which can also mean what somebody can get financing for.  Good luck.

Do you own the property or lease?

Name and location?

Pig Pen BBQ
Lebanon Mo

We lease.

Reason for selling is parents are just tired. Dads had some health issues and they want to simplify life and be with grand kids

Very impressed with what I see online about your company.  Looks like the place has a great following.

Thanks. Updated my post above yours.

Unfortunately, the numbers given shows that there aren't enough profits to justify a purchase, in my opinion.



At best, someone could walk away with netting $500/week, doing almost all the work themselves.



Plus, there's a lease in place that has to be transferred, which could have been negotiated nicely, or not.



Someone would basically be buying used equipment = pennies on the dollar.



I'm not trying to insult anyone, just trying to look at this scenario & how most would look at this example.





Assuming the food is of good quality, why not try to reinvent the business?



The Demographics of the area shows a below average median income for the State.



Your prices could be too high for the location? Customers are always looking for service, quality & value.



Actually, Lowering prices & keeping portion sizes in check could bring more foot traffic, especially that lunch crowd.



Your 'cafeteria' style model should have a killer lunch, with table flipping quickly.



Is there a catering option, i.e. Trays that offices, or drug reps could choose from to feed a group of people?



*Dinner Deals, i.e. Whole Roasted Chickens for the family; 'Even Pigs need a Break'



Chicken is the most stable priced protein, Pork prices have come down, beef prices won't for a long while, but don't lower quality, ever; watch those portions.
The Decor needs some tweaking, plus it's very bright. Get rid of the Fluorescent lighting in the dining room. Black Track lighting could help warm up the dining room, as well as some fresh paint on the walls & drop-ceiling (I would choose dark brown or black to counter that floor) & furnishings...plus, wood, wood, wood



Old wooden chairs, wood benches, wood tables, wood picture frames for the walls; Nothing has to match.



Here's your motivation...look at the colors & materials.








"All Pigs Welcome"



Maybe add similar fencing, so when the customers enter they are 'corralled' towards the counter.



As simple as spray painting 5 gallon buckets brown, fill with sand or cement to anchor your fences?



You need darker furniture & accent pieces to offset the 'bright' floor.



I would also look at adding real plates & silverware; Typically, small commercial dishwashers can be rented at a reasonable price.



Keep it Simple, Clean, Welcoming & streamlined = money making machine; Feed the masses
*If burn-out has already occurred, try to negotiate with the landlord to close & walk away; If there is no recourse, liquidate...today.



The Stress isn't worth whatever perceived value expectations.



Happy owner, happy employees, happy customers.



Miserable owner, miserable employees, no customers; Body Language sets the tone.






I could go on & on, but I think your family can easily turn this around, adding value & options.





Breath in, Smile & Breath out...There's the secret to success


WE all lose OUR Mojo at times throughout life, it doesn't mean WE can't get it back.


Best of luck to you family!
 
 
 

As a person who is somewhat familiar with a successful BBQ operation I would be curious as to what a BBQ sandwich means to you.

Would you go so far as to describe from uncooked meat to plate how you come up with your regular BBQ sandwich.

As of right now that business has no to little  value but value as a working job could be had.  Please tell me how you do your food.  

If you do this and I see that it can be done much better, I will write how to get the product done easier for less money possibly, tastier--ie-great and get you to money making.

The guy who wrote about the decor did you a huge favor and those things need to be done asap.  I will also give you low cost but customer loving benches that can be made for your type place.

es

All input to date is much appreciated.

Pulled pork : start with raw boneless pork loin, put two in a large pan meat up, rub with season salt, rib rub and black pepper, flip and repeat. Smoke over oak/hickory. We pull it with a Ro-man pork puller. Can order it wet or dry as well as with or without slaw. Wet has our house sauce already on it. Our buns are a bakery bun not walmart crap

Why are you using pork loin,you should be using shoulders,known as butts.Why are you putting the meat in a tray to smoke.the smoke is not getting into the meat.the smoke needs to be able to get around the meat.why are you using oak.stick with hickory for pork if you can find it consistently.every time you change the type of wood you are gonna change the flavor.oak is better for beef.what temp & how long.I smoke pork 12hrs at about 240/260.till internal temp is 175/185 for slicing.195/210 for pulling.What kind of smoker are you using?Is it holding temp.You don't want the temp to go way low(cause you need wood & jump way up when you add wood.Is your sauce any good. I've been doing bbq for about 11yrs now.If ya have any questions pm me.You have great reviews...but I could not find a web site? why? For $50.00 a year you can't beat it.I see you close at 7:30.Is that on Fri/Sat also?if so money lost.How is your food cost? labor cost?

I've eaten at your place a couple of times and it was tasty.

As far as a business price goes, talk to a business broker.  They'll have you do a work sheet that will calculate "net owner benefit" or some other term they like to use.  It is essentially:
- Start with net income from tax return or income statement
- Add back depreciation, amortization and financing costs (interest)
- Add back your pay + payroll taxes
- Add back any personal expenses you run through the company (company car, cell phone, etc)

Do this for each year.  This gives a cash flow number that would be available to a prospective buyer for debt service, his own paycheck and profit.  You can use the last year's cash flow or an average.  The broker will help with this.

Depending on the strength of your business, multiply that number anywhere from 1/2 to 3.5.  You're probably going to be in the mid to lower end due to the short time in business.  

Add in a pittance for equipment in place and that should give you an idea of what it might be worth.  Keep in mind that whoever buys it will be buying a job, and not as an investment, which will reduce the potential number of buyers.

The broker will probably take 10% of the sales price to make the deal.

You will most likely be expected to carry back (finance) part of the purchase.  If you could offer full financing (get at least 10-20% down from the buyer), you could get an income stream, interest payments and a get a wider range of buyers.

Start ups are hard to sell due to lack of history.

If the work is becoming too much for the family members, could you hire and train a restaurant manager to take over their duties?  Find a motivated person with the ambition and skills to run a small place, offer incentives based on profitability and work with them to take over the day to day tasks.  You may end up netting little to start, but that would be better than just shutting the thing down and losing it all.

I know some business brokers in Kansas City.  Send me an IM if interested and I'll send you their info.  Maybe they know someone in your area that would be able to help.

I lost this thread as I don't usually come to this section of the website.

I read where some of the advice is already given and you seem to have a good attitude and a willingness to hear other people's thoughts--good for you.

The only meat for  pulled pork should be Boston Butts or whatever they call it there.  The way it is cooked and served is where we will go away from most advice.

Smoke the meat, dry with no seasoning is fine.
Refrigerate the meat and when cold or the next day run through the slicer set at a quarter inch or less, preferably less.
Keep this sliced meat ready and when you get an order, throw a serving on the flat top and sautee it then let it sit on the heat until it gets crunchy.
On the sliced portion of the bun, apply butter and face down on the flat top until toasted, this can happen very quickly which will also steam the outside of the bun and make it 10 times better.
Don't heat the outside of the bun except for the residual steam from the grilling.
Put meat on the bun and top with sauce, add slaw if you have it and it should be different from what people there are used to.

Same with burgers, got to grill the bun and thinner burgers are better burgers, if you want to give a goodly portion of meat, use two patties but thinner ones.

I don't know your area but offer a turkey burger for the lunch crowd, not a premade one but throw a hunk of meat on the flat top and spread it down with your turner.

Webstauraunt store online has  bun butterers for a low price.

Never sauce the meat prior to reheating and I would not serve a sandwich from freshly cooked pork, maybe a plate but even then it is better cold, sliced and on the flattop.

If you don't have a flattop, get something that will let you try it this way and serve some to people so you can see their reaction.  Butter those buns or use the grease that cooks out of the meat on the flattop.

Please also try a regular bun as well, here Colonial and Kroger buns work just make sure it is one that does not fall apart.

Please try these things and write what you think.