How to sell a café: handover notes

When a business owner decides to sell a café, there is often a marked difference compared to other businesses in relation to the transfer of ownership.

A café that is well-run usually has controlled and established practices/methods when it comes to a range of functions within the café. When you do decide to sell a café, a potential buyer may expect you to conduct a thorough hand over as part of the contract of sale. The duration of this hand over is different for each case, and is determined by the buyer’s experience, the price of the business and the size of the café.

You may agree that as part of the contract of sale, you will actively engage in a month of handing over the business. A smart buyer may even stipulate in the contract the hours expected of you in the hand over period as the often-informal mode of showing a new owner how the business works can often lead to frustrations.

View the time spent teaching the new owner the processes that make your business work as earned income, included in the sale price of your business.

Breaking up jobs when selling a café

Create structured handover notes and a calendar/checklist to follow. These should include:

  1. Recruitment processes

You may want to convey why you have employed the people you have, what characteristics you value in them and where you see them going within your business. Cafes are notorious for having a high turnover rate. This is often unavoidable, as a café attracts a younger worker who may want to travel or find work that relates to their studies while working for you. Communicating what you look for in potential staff to the buyer will help them keep staff for longer and create a more seamless customer experience as a business.

  1. Service processes

One of the most important things to communicate when selling a café is how the café works!

A waiter pours wine into a glass

This aspect of the handover involves showing new owners how the café functions front-of-house day by day. Are staff separated into sections within the café? Do they stick to these sections when it gets really busy? What Point Of Sale tools does the café use (iPad; Card-only; specific POS systems)? How are orders communicated with the kitchen and reported on at the end of the day? How are customer complaints resolved?

This is one of the most important stages of the hand over as it will communicate how well the café runs as a business to the potential buyer. You and your business are on display. If there is a cool-off period in the contract of sale, this is a time where the buyer may decide not to buy the business.

  1. Finance management

This is one area that your potential buyer will want to know the most about. What level of detail do you go into when analysing your sales (what dishes attract the most money, what attract the least, what trends/patterns there may be in different days of the week as to what is sold) and does your POS allow for this sort of data tracking? Secondly, how are finances tallied within the business, when does this happen, what sort of tax concessions does the business have etc. This and the front-of-house management of the business are the two areas in which you and a potential owner will spend the most time when selling a café.

  1. Suppliers

A buyer doing their due diligence will want to quickly see what outstanding payments you have for your suppliers. If you do have significant debt owed to suppliers, this will decrease the sale-value of your business. If you actively shield the buyer from this knowledge, you can be legally liable for the debts.

A fish market interior

Apart from this, a buyer will want to know how you manage your suppliers, when and how you make orders and how regularly your orders change. Don’t be shocked if they contact your suppliers to check whether you do owe money to them and how healthy your relationship is with your suppliers.

  1. Marketing

A buyer worth their salt will want to know how you have built your business to where it is. For instance, what marketing practices have you/do you conduct (social media management, search engine marketing etc.)? A cafe can benefit from using image-based marketing platforms, such as Instagram, to drive new business. If you have a dedicated content plan for your marketing, communicate with the buyer how this is managed, who your target audience may be, how you target your marketing (do you spend money on your marketing?), what strategy is involved and how do you measure marketing success in the cafe.

A professional photograph of food

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