Selling your Hotel? Plan Ahead and Avoid These Six Common Mistakes
By Mike Handelsman Group General Manager, BizBuySell.com | October 23, 2011
If you are looking to sell your hotel or motel, chances are you are not alone.
At BizBuySell.com we've seen a financial stabilization of businesses in the marketplace. Now a latent supply of owners who were waiting for their business to become profitable again are beginning to emerge and are looking to sell. This influx of sellers can result in a crowded marketplace, which means sellers have to be on top of their game to get the best price for their business.
As a rule of thumb, the best businesses command the best valuations, no matter how crowded the marketplace. But with competitive pressure from other sellers, there is little room for mistakes. This guide will help you avoid common mistakes that can derail a hotel or motel sale.
Mistake 1: Not Properly Preparing Your Hotel for Sale
Before buyers sign on the dotted line, they will research your business as they would any other big purchase. Sellers need to be prepared to demonstrate that the worth of their business matches the asking price. This means keeping your financial records in order. Keep a minimum of three years' worth of documents (ideally a longer history), including tax returns and expense records. Good record keeping is a simple way to establish buyer trust. Be sure to resolve any outstanding issues that could derail a sale, like legal issues or unfilled key management positions. If your hotel is struggling, focus your efforts on restoring it to profitability and constructing a plan for continued success. A detailed strategy can give you a much higher chance of attracting the right buyer and making a sale happen.
Just as important as the paperwork, don't forget the physical elements of your business as well. Consider upgrading technology, establishing and documenting key processes and even sprucing up your lobby and rooms – the physical appearance of your hotel is often the first impression the buyer gets, so make sure it's a positive one.