My dessert shops generates a lot of high revenue (500k+), not profitable. Highest costs are labour and rent (400k+) and not a lot on the food (~100k). Last year, it got about 600k which has profitability (about 50k+) but this year its below 0 as sales reduced.
I want to sell it, should i sell it for parts? sell it to another owner who can fix it? I assume the reason for lower sales is honestly, I think people spending less.
How do I sell it to the new owner without being dishonest while still being attractive to the buyer? How would i price it? This is located in one of the busiest areas in my city.
How should I sell my not so profitable but high revenue generating business?
byu/rosedye inEntrepreneur
Posted by rosedye
13 Comments
Be straight about the numbers. High revenue shows demand, low profit shows what needs fixing. The right buyer isn’t scared of that, they’re looking for a turnaround. Price it on location, assets, and potential, not just last year’s profit.
Talk to a broker, they will help you price it and position it correctly
Any thing you can process-ize, write up the SOPs.
See if you can find a way to capture any efficiencies, capture any places you can eliminate waste, and do your best to make it run as cleanly as possible so that anyone looking to buy feels like they’re buying a well oiled machine.
It might also help you realize some profits before you sell.
Where are you located?
Lot of questions, but I guess the first is how close to 100% utilisation were you in that $600k year?
Could good marketing bring more money in without a subsequent increase in overheads? Rent’s not going to change much, food will be proportional, what is the maximum amount the business can make without taking on more staff?
And what city is this?
Honestly why don’t you bump your prices up?
Add a « happy dessert » section to your offerings.
Can you reduce labor costs by having an AI agent do some of the labour?
E.g. kiosk for order, and perhaps integration to Uber eats, fantuan, door dash, etc?
Ozempic and related are hitting snack and dessert makers hard. Economic slowdown is also true, but spending may rebound and yet this sector as a whole might not.
Can you drop the lease and sell off food truck or event you advertise tru social media?
Your highest return is to sell your position. Train him/her to replace you. Make a deal for % royalty. I doubt your EBITA turns up anyone ready to buy unless pennies on the dollar.
How do you comp your staff? Centralize production operations in an area with LCOL and keep retail staff lean. I’ve seen very successful business models where production is like an assembly line and allows chefs/bakers/line cooks to focus, you could likely meet current sell thru rates in half the time. Buy a depreciated reefer truck and write it off, make deliveries yourself and oversee quality.