InnConcierge

When is the right time to sell your inn?

When is the right time to sell your inn?

The right time to sell your inn is NOW! .....provided you are prepared and have your bed and breakfast house in order. A turnkey bed and breakfast operation that is profitable is an attractive investment proposition to the new order of business investors out there today.....AND, provided you can ensure that the income level generated annually covers likely prospects' debt service, if they have to borrow to purchase your bed and breakfast, and they can put at least 20% down, then you are READY...IF the price is right!

Getting your house in order is tantamount to securing a good offer and to do this there are several questions you must be prepared to ask yourself first. Are you ready to sell this to someone you do not know, or to someone who cannot guarantee that they will look after the bed and breakfast and its reputation that you built all of these years? If so, are you willing to position your inn so that it is performing better than ever? If not, then why not? There is nothing like a good audit of your inn operations and life goals to ensure that you are making the right decisions. So, I would like to suggest some highly recommended tips to help with the decision making.

Firstly you should always know what your occupancy levels are, as well as ADR (Average Daily Rate) per room. Knowing these numbers will help you to stay focused on your budget, sales and marketing plans each year.

Next, be prepared to present at least the last two if not three years Tax Returns.

List any improvements made by you to the property or major renovations with approvals or extensions with any floor plans or surveys and permits, plus costs to prove added value, such as adding a room(s) or change of use for revenue increase purposes (examples might include changing out a room to provide a small or large Spa Treatment facility or adding a pool or even a bathroom).

If you can show a recent real estate appraisal or business valuation of your bed and breakfast or inn within a few years, this will also be helpful to the process of arriving at a fair market value.

Be sure to keep a steady inventory of all items you may wish to include and consider those valuable family heirlooms that just simply have to go with you, if/when you decide to sell.

With these critical ‘first step' elements, you will then want to consider the inn's current status as far as year over year real occupancy is concerned. If the business is not growing then you might want to consider improvements that will generate new growth by deciding upon an exit strategy that incorporates a careful plan to improve the bottom line. To create an exit strategy you will need to take note of my earlier recommendations and at the same time decide upon how you will achieve this.

Over the past several years and during these economic meltdowns, it takes on average eighteen plus months to sell an inn nationwide. Of course that also means that it could take as little as nine months or as much as twenty four months, depending upon how successful you are and many other factors. SO...be prepared to wait and in the mean time, GET READY!

Next Blog..... Selling your inn as a ‘Quiet Listing' .....so that everyone can hear you're for sale, except your guests!