Ensure your business is ready to set sale

Potential buyers are on the lookout for lucrative opportunities in Scotland’s licensed trade, writes Paul Miller of Bruce & Co

SCOTLAND is a wonderful place to visit.

With its historically-enriched cities, idyllic beaches, spectacular scenery and famous golf courses, it witnesses high levels of tourism year on year.

Paul Miller, Bruce & Co

During the summer of 2014, tourism spend in Scotland rose 6% on the previous year,  from £4.3 billion to £4.6bn – a considerable increase within a relatively short space of time.

Latest reports show that visitors to Scotland spend approximately 21% of their holiday budget on eating and drinking, so it is no surprise that buyers have identified the licensed trade as a dynamic and profitable sector.

Tourism Intelligence Scotland has found that £800 million per year is being spent on food and drink alone by overnight visitors, meaning that Scotland is generating £2m per day, and over £1500 per minute, through food and drink tourism.

With tourists prepared to spend their money in Scotland’s hotels, bars and restaurants, businesses within the sector benefit greatly; with this spend predicted to further increase between 2015 and 2020, there hasn’t been a better time to capitalise on this interest in the sector and sell your business.

The licensed trade is a hot market; potential buyers, including an increasing number of international buyers, are on the lookout for lucrative business opportunities.

In Scotland alone, there has been a significant rise in the number of businesses being purchased by international buyers. As an example, Bruce & Co recently facilitated the sale of Ceilidh-Donia hotel in Edinburgh to a Chinese consortium.

If you have considered selling your business, now is the ideal time to take advantage of this dynamic marketplace. You should firstly consider the following:

• Reputation

Buyers are attracted to businesses that have a well-established reputation so it is important to highlight this. Businesses within the licensed trade rely on a good reputation to trade successfully and grow; it also allows buyers to build on the business, rather than having to start from scratch.

• Accounting information

Prospective buyers will want annual business accounts which are accurate and cover the current and previous two years reporting periods. A consistent performance in turnover and profit provides reassurances to buyers that the business will be a lucrative opportunity for them.

Hotel room

• Owner’s accommodation

If your business has owner’s accommodation, it is vital to advertise this as the majority of people looking to acquire in the licensed trade are seeking a new lifestyle opportunity. Highlighting key features of any owner’s accommodation can help potential buyers decide whether the business is right for them.

• A well-presented business

Businesses often need to be in a good condition from the outside and inside to attract buyers. Buyers often want businesses in which they can start trading easily, without having to spend money. However, the opportunity to renovate can be exactly what some buyers are looking for.

• Development opportunities

As previously mentioned, whilst most buyers want an established business in order to start trading as soon as possible, they also want clear opportunities to grow and develop the business. It is important to highlight areas of the business which can benefit from development, in order to enhance the perceived, and real, value of the opportunity.

When you have considered the areas covered above, it is important to ensure you advertise your business in the right locations, especially in cases where your business can attract international buyers. For example, having an online presence allows international buyers to gather information about your business easily.

Arguably, one of the most important things you will need to do when placing your business on the market is to instruct the right broker to facilitate the sale of your business. You can gain valuable industry advice from a specialist broker, and they can help you market the business to attract the right buyers.

• Paul Miller is the chief executive of Bruce & Co.