When a quick business sale happens out of the blue it can be a very pleasant surprise. But though you can rarely depend on a quick sale, once you have found a buyer there are a number of things you can do to help things along, or at least to avoid some major snags.
So, here’s a rundown of some essentials you should think about when you need to sell your hotel quickly.
Consult the experts
If you’re looking to sell your hotel business, it makes sense to choose a business broker and other professionals who have the necessary experience to do a good job. Most importantly, you need to appoint someone who has good contacts within your sector, and a good track record of selling similar hotel businesses.
Price your business to sell
Especially in a market where prices are falling, to sell your hotel quickly you must prepare accordingly, this includes pricing the business so that it becomes an attractive proposition. Put another way, as a prospective buyer in the present economic conditions, what sort of pricing would induce you to buy your present hotel?
The chances are you would want a solid, value-for-money investment but at a really good price. Only then would you consider it an ‘unmissable’ investment opportunity. In essence, if you price your hotel too high, you are effectively giving up on any real prospect of a quick disposal.
At the same time, however, if you price your hotel too low, not only will you be missing out on deserved cash, but you might also cause buyers to be suspicious. You should, therefore, get a professional valuation from an expert.
Management and staffing
While this is rarely a short-term fix, having an experienced management team and a well-trained workforce in place makes your hotel much more saleable. In theory, a new owner could make changes straight away.
But in practice, a well-run hotel which can continue trading under new ownership from day one is a much more desirable commodity regardless of the buyer’s future plans. Any effort you can devote to upgrading the personnel and management framework your buyer will inherit will positively impact upon your chances of a speedy sale.
Present comprehensive paperwork
If you supply little more than basic paperwork, you are thus assuming that if the buyer’s solicitor and/or due diligence team require further information ‘they will ask for it’. That means you are preparing for delay as well as potentially giving the buyer’s team grounds for further haggling over the price, thus making your chance of a quick sale even more remote.
Put your effort into providing up-to-date documentation covering everything that will come up as well as matters which may be requested. This gives you a long list beyond trading accounts and booking schedules. You may be asked about: the property’s use classification, rateable values and rate payments, building plans and planning consents, the cost of utilities as well as surveys and inspections covering fire and asbestos risks.
Questions may also be asked about insurances covering a whole range of risks, and some of these may also require evidence of certification. The same will apply in other areas too. For instance, you may need to supply details of your drinks licence, and you may have to provide evidence of food hygiene inspections for your kitchens. Then there are niche areas such as staff qualifications, health and safety certificates, and even licenses covering music and entertainment.
Go the extra mile
Providing paperwork can be a significant burden but it will make an important contribution to avoiding delays. As a keen seller you should check all certification is available and up-to-date and be pro-active in thinking through and anticipating buyer requests. For example, if your sale information suggests you are a member of certain hotel and tourist organisations, do make sure you renew your membership before sale time, otherwise your credibility may take an unexpected hit.
And likewise, if you have preferential arrangements with suppliers or reciprocal arrangements with local partner businesses, take the trouble to obtain some assurances that the prospective new owner will enjoy the same trading advantages. Then convey this information to the buyer.
Be prepared to troubleshoot if required
Sometimes short delays are inevitable. But if you stay in close touch with your own team, there may be many instances where your prompt intervention may get things moving.
For example, if a document is out of date your solicitor may need to correspond with certain parties to put things right. But having a vested interest in a quick outcome, you may well be able to make one quick car journey to resolve the same issue in just a day.
By Jo Thornley, Head of Brand and Partnerships at Dynamis. Joining in 2005 to co-ordinate PR and communications and produce editorial across all business brands. She earned her spurs managing the communications strategy and now creates and develops partnerships between BusinessesForSale.com, FranchiseSales.com and PropertySales.com and like-minded companies.