If you’re thinking about selling your pizza restaurant, here’s something I tell owners all the time:
Don’t put it on the market before you know what a buyer is going to see.
The difference between an average pizza shop and a highly desirable pizza shop can have a major impact on the sale price.
The good news?
Many of the things buyers care about can be improved.
Here are seven.
1. Improve Your SDE
Seller’s Discretionary Earnings—or SDE—is one of the primary metrics buyers use when evaluating smaller owner-operated restaurants.
The valuation guide identifies approximately 1.8x–3.2x SDE as a common range for pizza businesses depending on their characteristics.
That means increasing your SDE can have a double benefit.
You make more money today.
And you potentially increase the value of the business tomorrow.
2. Reduce Owner Dependence
If you’re the person who opens the restaurant, orders the food, handles payroll, manages employees and closes every night, you’re going to have a problem when you sell.
Start developing a manager.
A manager-in-place model can make the business more transferable and can increase the attractiveness of the operation to buyers.
3. Clean Up Your Books
This one sounds boring.
It isn’t.
Your tax returns, P&Ls, POS reports and balance sheets tell the story of your business.
The valuation guide recommends assembling three years of financial information, including tax returns, P&Ls, POS reports, balance sheets and lease documents.
4. Control Food Costs
If your food cost is 35% and another comparable pizza shop is running at 30%, you’re giving away profitability.
And profitability is what buyers are buying.
5. Look at Your Delivery Mix
A buyer is going to look at how much revenue comes from DoorDash, Uber Eats and other third-party platforms versus your own delivery operation.
Third-party platforms can provide customer acquisition and reach, but commissions can put pressure on margins.
6. Protect Your Lease
Your location is an asset—but only if the buyer can continue operating there.
Before selling, review:
- Remaining lease term
- Renewal options
- Rent increases
- Assignment provisions
- Landlord requirements
7. Start Early
This is probably the biggest one.
The guide recommends beginning exit preparation three to five years before a sale so owners have time to identify weaknesses and improve value drivers.
That’s how I like to approach an exit.
Don’t just sell the business you have. Build the business you want to sell.
If you’re thinking about selling your pizza shop or restaurant in Tampa Bay, Clearwater, St. Petersburg, Lakeland, Orlando or elsewhere in Florida, let’s talk before you put it on the market.
I’m Michael Shea with Transworld Business Advisors.
More information is available at Your Florida Business Broker.
Michael Shea represents the Tampa Florida Transworld office. In business since 2005, he has established a reputation as a trusted business broker across Florida’s key markets- from Tampa to Orlando, Melbourne, and more. Over the past two decades, Michael and his team have closed over $1 Billion in sold business volume and presided over more than 476 transactions. His credentials include the IBBA Certified Business Intermediary®, and most recently, the prestigious Certified Exit Planning Advisor® (CEPA) credential. He is also a Florida Licensed Real Estate Broker and Business Brokers of Florida Board Certified Intermediary . Shea is a member of the VRMA and a recognized expert in property management and vacation rental management business sales