HOW TO SELL A FOOD TRUCK BUSINESS
Selling your food truck business is one of the most important
decisions you may have to make if you are starting to feel that
the time has come to cash in on what you have been building
all these years.
Whether it is because you have other business or investment
opportunities that you would like to invest in, or if you are
ready to retire and travel the world, the decision to sell may be
hard to make. But, when you are ready to make that decision, these important
tips below may help you prepare to sell your food truck business as fast as
possible, while still getting the best price possible.
Over the last five years, food trucks have risen in popularity throughout our
country. There are tens of thousands of food trucks across the United States, and
you can pretty much spot them across some of our larger city’s, and at sporting
events, or other venues. Food trucks have become very popular, and the industry
has seen a 6.8 percent increase in growth in the last five years, which makes this
the perfect time to cash out and get top dollar for selling your food truck
business.
For your food truck business to have become a success, you have had to pour a
lot of time, energy, and money into building it and making it successful. This is
why there is value for someone to buy your business, so they can hit the ground
running by starting with a fully functioning, and profitable business. There is
value in the truck, the equipment, the documented routes or places to setup that
are profitable, that you have learned by trial and error.
There is value in the website, if you have a website. There is value in the business
name, the reputation that you have built as you have built a loyal customer base
that knows you have good food, deserts, or beverages that they enjoy. There is
value in the recipes you have made that your customers love. Most importantly,
there is value in the income and profits that you have that you can prove on
paper that will be carried forward with the new owners of your amazing food
truck business.
7 Steps To Take When Selling Your Food Truck Business
Whether your food truck sells hot dogs, burgers, italian food, mexican food,
chinese food, ice cream, pretzels, popcorn, or any food or beverage item, the
selling process is relatively similar and straight forward. Take the following seven
steps into consideration as you begin to prep your business for sale.
1.
Plan Your Exit
2.
Get Your Business Ready to Sell
3.
Gather and Organize Your Documents
4.
Hire a Business Broker
5.
Get a Business Valuation
6.
Set Your Food Truck Business Selling Price
7.
List Your Business For Sale
Plan Your Exit From Your Food Truck Business
The first thing to start working on is to plan your exit from your Food Truck
Business. Any potential business buyer will want to see and understand how your
business will run without you. The answers to these questions will help get you
started in thinking about the right things to help you get organized and ready to
sell your food truck business.
Some questions to think about:
1.
When do you plan on leaving your business?
2.
Will your current team members stay with the food truck?
3.
Does your food truck need any renovations?
4.
How long are you willing to provide training to the new owner?
Get Your Food Truck Business Ready To Sell
When you are ready to sell your food truck business, you should do some work to
get it ready for potential buyers to take a look at it. A new owner will want to walk
right into the business and have everything working, have happy customers that
they will be proud to show that they are the new owner that will be providing the
great products that they will continue to enjoy. You will want to make your
business stand out from the others, so it will sell quickly and get you the best
price to make the most profit.
Some good things to work on are:
1.
Fix anything that needs to be upgraded or repaired.
2.
Add to the curb appeal, and the internal look as well, to attract more
customers, and potential buyers.
3.
Get more engaged on your social media to continue to grow your customer
base.
4.
Expand or fine tune your menu options.
5.
Encourage customers to write positive reviews online to show others how
great your product is.
6.
Look for new money making routes, events, festivals, to identify additional
sources of revenue.
Get your Documents Organized
Now it’s time to start preparing your business paperwork to make sure you can
show that you have your business in order. Any potential buyer will want to see
your financial documents that will show them that there is value in the business
and it is worth what you are selling it for. They will want to be able to see what
the business tax returns show, the cash flow each month, income statements,
balance sheets.
They will want to see that you can prove the value is there. It will show them that
you knew what you were doing, you are making a good profit, and this is a good
investment for them to buy your food truck business. Some business sellers will
engage their accountant to help them with this piece if you have some
complicated financials, or if you have an accountant that is already familiar with
your business and may even have this paperwork easily put together.
Documents you may want to gather:
1.
One to three years of profit and loss statements.
2.
One to three years worth of balance sheets.
3.
One to three years of full tax returns.
4.
Inventory list of equipment.
5.
Inventory list of product and supplies.
6.
Pink Slip or loan details for the actual food truck itself.
7.
Any service or product contracts, etc, that you may have.
8.
Any licensing or permits, so the new buyer will understand what they need to
start applying for in their name.
List of Equipment
You should give an estimate for the value of all of your equipment in an itemized
list. You should include any information or paperwork that you have that would
back up the estimated value for the equipment as well. This would include your
truck, any stoves, grills, microwaves, tables and chairs, awning, heaters, freezers,
blenders, refrigerators, or anything else of value that helps to add to the value of
the food truck business.
Other documentation may be needed as well, so it is good to pull those together
if you can so that you have them ready. The more documentation that you have,
the easier it is to show any potential buyers that your business is stable,
profitable, and a good investment opportunity. You may need to provide any
insurance policies, employment agreements, supplier contracts, documentation
for any trademarked or copyrighted recipes that you have created (many sellers
do not have these), equipment leases, bank statements, business loans,
agreements with property owners that you park your food truck at.
The more paperwork that you have ready to go, the better. But, do not
overwhelm yourself. Gather what you can quickly and easily, so that you can
provide some information to your business broker. Then, if you can come up with
more documentation as you move forward that is great. It takes several days to
get your business listed, and can take months to sometimes years, to find the
right buyer. So you usuallly have quite a bit of time to pull additional
documentation together. Also, don’t be worried about sharing information with
potential buyers. Your business broker can have any potential buyers prove that
they have the funds to buy the business, and sign a Non-Disclosure Agreement
(NDA), so they won’t be able to share your information with others.
Hire A Business Broker To Sell Your Food Truck
Business
If you’re looking to buy or sell your food truck business you
should use an experience professional who understands the
market and can save you both time and money. If you would
like to discuss any of this further or the types of services that
are offered, please contact Michelle Mendenhall as she is a
Certified Business Broker that is a member of the IBBA (International Business
Brokers Association), and a Commercial Real Estate Specialist.
Michelle Mendenhall
Professional Business Broker, IBBA
Commercial Real Estate Sales & Leasing Associate
Phone: 916.459.7526 DRE #02116152
LocalGirlGoesCommercial.com
michelle.mendenhall@localgirlgoescommercial.com
michelle.mendenhall@expcommercial.com
Get an Accurate Valuation
Now that you have hired a business broker to sell your food truck business, they
will work with you to determine the value of your business. It’s good to put some
thought into what this number should be for yourself as well, so that you have a
good ball park number to start from. You know your business best, but there are
several ways to go about valuing your food truck businesses, and the help of a
qualified and experienced business broker will ensure that you put together an
accurate asking price for your business that will attract the right buyers, and get
the business sold in the shortest amount of time, with the highest income
potential to make it more profitable for you.
A business broker does not typically charge you anything unless your business is
sold. Though, this is a conversation they will have with you so that you fully
understand what they will charge for their services. Your business broker will
consider the value of your food truck, the net income of your business, as well as
any other assets, or liabilities that you have with the business. Some food trucks
can bring in a lot of income, but may not be profitable. If your is highly profitable,
it’s important that you are able to show that, because this will increase the value
of your business tremendously.
Set Your Food Truck Business Selling Price
Picking the right price to sell your business is important. This price point is what
will attract buyers to make the decision to look into buying your business or not.
This is why they should know what it is worth to you is important. If you are
looking to sell it quickly, the best thing you can do is set the price a little low, to
attract more buyers.
You never know, multiple buyers may become interested in buying your business,
which may make one or both of them offer you more so that they can buy it.
Setting a price that is too high may scare away potential buyers because they will
think that the business just is not a good investment for them, or they may feel
that you are not really that serious about selling it.
List Your Food Truck On The Market
The final step in getting your business ready to sell is to list your food truck on
the market so people know that it is for sale. There are a lot of places that you
can advertise your business for sale, but your business broker will handle all of
this for you. If you hire an experienced business broker, they will create
advertising material, and send it to you for your approval of the content, and how
it looks. A professional business broker has access to advertising streams that
have serious and active buyers that are looking to buy a business, to give you the
best visibility.
If you are ready to sell your food truck business, you should consider partnering
with Michelle Mendenhall with Local Girl Goes Commercial. She has years of
commercial real estate experience, she is a Certified Business Broker, and she
has access to the right pool of potential buyers as she is a member of many
different business selling websites to give your business for sale listing the right
exposure to get it sold. Get in touch with Michelle and get started today!
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