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How to Sell Your Bar

Decided it’s time for last call on your bar in Canada?

If you’ve decided it’s time for last call on your bar in Canada, the chances are you’re competing against others who may also be planning to do the same.

So, if you want to exit the business and show a good return on your investment, it will be down to you to make a real effort to attract potential buyers.

Sector overview

The Canadian bar and nightclub industry faces persistent pressure from long-term trends such as home alcohol consumption, increasing prices, a general change in consumer preferences and other factors such as a high-profile drink-driving legislation.

Nevertheless, figures show beer, which accounted for 40.6% of total sales worth $9.1 billion, is still the most favoured drink.

Behind this the market continues to evolve with wine sales continuing to grow, spirit sales also up, and niche products such as ciders and coolers reporting more modest but sustained growth.

Strategies designed to overcome the sector’s perceived challenges have resulted in much fragmentation and a host of new formats: Wine bars, cocktail lounges and gastro pubs have attempted to capitalize on the growing popularity of wines and spirits.

Themed pubs, live entertainment and craft beers have sought to match venues ever more closely to the needs of their local customers or target social groups.

Today, a bar may still sell for under $100,000, but an average bar is more likely to sell for between $200,000-$500,000 – or more as a bar-restaurant.

Are you ready to sell?

Looking at things from a buyer’s perspective you may still have put a lot of work into your business.

Re-building things from the ground up gives you the chance to improve things to the advantage of your sale.

But, a buyer will also want to know how your successful formula will work in your absence.

You will need to be ready to produce convincing evidence that the blueprint for success no longer depends on your presence and input.

Business valuation

Any professional valuation starts with full and accurate business records, showing the financial state of the business, and establishing important trading information such as whether the bar relies on footfall or regular clientele.

Trade fixtures and fittings must be included, but whether the business is leasehold or freehold, details of the lease terms or any restrictions on the freehold must be laid out clearly.

In addition, any valuation will also take into account any outstanding business debt – therefore it can only work to your advantage to clear as much lingering debt as possible before putting your bar on the market.

Beyond these physical assets and the maximum capacity of your venue – the value of your business will be determined by its ability to generate revenue.

Preparation for sale

A potential buyer will always cast a probing eye over the assets which come with the sale.

That means noting the general state of repair, age and condition of equipment including kitchen appliances, as well as assessing the suitability of your business IT system.

Like any property sale, potential buyers will be more attracted to a well-run business which won’t require excessive capital expenditure right from the outset.

For you as a seller, that means getting right up to date with repairs and maintenance – which is always a cheaper option than giving buyers the chance to downgrade your valuation by far more than necessary.

More generally, you should also make every effort to keep your business running smoothly, which includes taking any and every opportunity to reassure your regular customers that the bar will offer them everything they enjoy now, and much more, even after you have gone.

Careful attention to these details will give you an important edge, stacking things in your favour in a market where your reward will be selling your bar at a price that reflects the effort and preparation you have made.

Find out everything you need to know about selling your business right here.



Paulyne Antoniou

About the author

Paulyne has devoted her educational life studying and working with film and media. After gaining a Diploma in Moving Image, Paulyne worked as an editor while simultaneously completing a part-time filmmaking course at the Metropolitan Film School.

@Be_theboss

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