Four Steps to Maximize the Price When You Sell Your Hotel Business
By Mike Handelsman Group General Manager, BizBuySell.com | January 15, 2012
For the hotel owners who may be ready to sell their businesses, the past few years have been a time to cut costs, make ends meet and await an economic recovery. There simply was no use in trying to sell the business when company revenues and profits were down and qualified optimistic buyers were hard to find. Low purchase-price valuations only made matters worse.
With the threat of a double-dip recession notwithstanding, 2011 has seen an improvement in the business-for-sale market and many experts expect continued, gradual, recovery in 2012. Financing options are improving for buyers and banks are putting a new focus on lending.
With optimism creeping back into the national economy, this may be the year in which you're planning to sell your hotel. In a recovery, selling your hotel can be a complex, confusing process. With that in mind, here are four simple tips to maximize your hotel's selling price:
1. Maintain, maintain, maintain
Business buyers are typically very savvy and will do their research before signing anything. That means it's important for sellers to be ready to demonstrate their business is worth the asking price. Your financial records need to be kept tidy, organized and easily interpretable. A good practice is to keep at least three years of documentation, including tax returns and expense records. A greater level of transparency will establish an important foundation of trust with the potential buyer.
In addition, be sure to resolve any outstanding business "loose ends." These could be short-term key vendor agreements, over-reliance on one or a few key customers and any pending legal or labor/employee issues. Loose ends that are left out could harm the relationship with the potential buyer. Again, full transparency will ensure buyer goodwill at the outset.