What Are Some Tips On Buying An Existing Bakery Small Business?
It's no secret that Americans have a major sweet tooth, and neighborhood bakeries have been servicing that craving for as long as we can remember. According to FirstReseach.com there are about 6,500 retail bakeries with annual revenue of about $4 billion in the United States.
Bakeries service all occasions from weddings, birthdays, retirement, and a whole host of other special occasions. Many bakeries do a brisk retail business, but really make their money in catering.
Here are my top tips for selling a small business bakery:
1. Survey the area and determine your competition.
A buyer should drive around the area to see who they will be competing with. Are there other bakeries within a 3-5-mile radius? Is there a supermarket near by that has an extensive bakery selection? If you are specializing in 5-6-dollar cupcakes, does the area that you are selling support that? By examining the area, a buyer will be able to determine if they will want to specialize in a certain product (cupcakes) or be an all-purpose bakery. A buyer should determine the need for bakery products in their area.
2. Ask how long the bakery has been established and why the owner is selling?
Buyer should investigate if this location has been a community staple and how long the current owner has been there. Many customers develop a relationship with their local baker and a buyer should ask why they are choosing to sell. I have seen locations where the rent had become to high to operate and ones where the seller simply wanted to retire and hang up their apron.
3. Determine an adequate amount of training and inquire if the current staff will stay.
Being a baker requires skill and so a buyer who plans on being an owner/operator should have a level of expertise in bakery and make sure they have adequate staff. A new owner should also be aware that bakeries operate at irregular hours, and their day may start at 2-3am. Since many in the community have a relationship with their local baker, make sure to put an agreement not to compete in the sales contract, so they don’t sell and later open up shop near by and compete with you.
4. Make sure that equipment is in working order.
This is very important because bakery equipment can be expensive and so before the close of escrow, a buyer should have the equipment inspected, and if repairs are needed, then either have the seller fix them or be credited money from escrow, so repairs can be made.
5. Specify that recipes are included in the sale, and a list of customer database.
Nothing could be more frustrating than finding out a seller does not want to sell their recipes, which can hurt the goodwill of the business, and also since many people come back to the same bakery for their special occasions, it's important for a buyer to receive a list of customers, so they can market to them of build a catering business.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|Bob Baumgarten, Business Broker: Southern California
National Business Brokerage is a full service brokerage company that has been serving buyers and sellers of Southern California businesses since 1994. We are dedicated to providing the highest standards of professional service for our clients. Phone Bob direct at 949-292-2008.
|Ryan Clark, Business Broker: Southern California
The Veld Group provides a refreshing approach to Business Brokerage, Mergers & Acquisitions and Business Consulting and Valuations. From Your Street to Wall Street, we cater to Main Street Businesses as well as more complex Strategic Firms and Start-Ups. Phone Ryan, Business Broker at 310-652-8353.
|Peter Siegel, MBA, BizBen Founder, ProBuy, ProSell Programs
Founder & President Of BizBen.com (since 1994). I am the Lead Facilitator for both the ProSell & ProBuy Programs. I consult daily with business buyers, business owner/sellers, and brokers and agents daily about buying and selling California small to mid-sized businesses. Call 925-785-3118.
|Michael Davidson, Business Broker - Southern California
Los Angeles Business Broker providing M&A quality services for Small Business Owners. We leverage our technology and expertise to Simplify & Expedite the Business Sales Process. Matching the right buyer with the right business is how we define success.
|Jack Oh, Business Broker: LA, Orange Counties
Business broker and real estate services in the Los Angeles and Orange County areas. 10 years experience with great negotiating skills. To sell a business or buy a business in the LA or Orange County Areas phone Jack and his team at 562-787-4989.
|Steve Zimmerman: Restaurant Broker Specialist, California
Steve founded Restaurant Realty in 1996. He has personally sold/leased over 900 restaurants, bars & clubs, & completed over 3000 valuations. The author of "Restaurant Dealmaker - An Insider's Trade Secrets For Buying a Restaurant, Bar or Club" available on Amazon. Reach Steve direct at 415-945-9701.
|William Park, Business Broker - Southern California
Highest Volume Broker in California, Simply Check our HUNDREDS of Listings! Over 25 Associates, Speaking Dozen Languages, Helping Buyers and Sellers of Small Business since 1982, Centrally Located between Los Angeles and Orange Counties, while Riverside & San Bernardino Counties are Very Accessible.
|Joe Ranieri, Business Broker: Orange, LA County Areas
Having owned retail/restaurant businesses for over 20 years, my interest turned to selling businesses rather than owning them. I specialize in LA & Orange County restaurants, fast food independents and chains, bars, & liquor stores. Call 714-292-5448 Cell/Text.
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