Selling a Hotel or Motel in Colorado
With the hotel industry earning $133 billion in 2021 alone, selling your hotel is a lucrative business. Travelers will always need a place to stay, and potential buyers understand the lucrative business opportunities in your industry. Ever since you bought a motel, you’ve put the time, money, and effort into making it a success. Murphy Business of Colorado is here to help you sell your hotel once you decide that it is time for all of your hard work to pay off.
If you want to get the highest price for your hotel or motel business, there are a few things to consider. The sales process begins long before potential customers walk into your hotel. To sell successfully, you need to think like a potential buyer.
Take a Look at the Hotel Industry Competitors
One of the first steps potential buyers will take is to survey the area to analyze your hotel and the competition. Get a realistic view of your position relative to the competition by reading online reviews and visiting other hotels. You will soon realize that maybe your beds are softer, but their lobby is much more refreshed.
Knowing your location benefits will help you set a realistic price and generate ideas for improving your business before the final sale. To simplify the sales process in the fastest, easiest, and most profitable way, you will need a professional team with industry experience. Although it seems easier (and cheaper) to complete the process yourself, the more experience you have, the higher the price and the fairer the terms. In order to achieve maximum success, you need a business broker, lawyer, and accountant to conduct the research and sales process.
The smart shopper will have multiple queries and questions about the status of your hotel. Buyers will request financial and corporate reporting for the last three years, including all operating expenses and income, occupancy, and regulatory compliance.
Utilize a Business Broker to Determine your Hotel Worth
Work with your accountant and lawyer to fill out income statements, corporate tax returns, and any other pertinent paperwork. Be sure to make several copies and have everything prepared ahead of time to speed up the process. Based on your finances, work with your accountant and commercial business broker to evaluate your motel value. Your financial background and the expertise of your team will help you determine a realistic but profitable asking price.
Potential buyers are likely to stay at your motel before you realize they are interested in buying, in order to experience the typical guest experience. Make sure your business is as show-ready as you are to sell. It’s not just about soaking pillows and vacuuming, but a broader improvement plan to put your motel at the forefront of the competition.
Be Prepared for Potential Buyers to ‘Shop’ your Hotel
Schedule a professional review to see where your business needs improvement. Customers are more likely to demand an inspection, and it is best that you are surprised by nothing found during this process. If there are red flags such as plumbing problems, infrastructure problems, or mold clutter, fix those problems immediately.
Very few buyers want to take on a project. They want to be able to hit the ground running when they take over your business.
Once the basics are laid out, focus on any cosmetic quick wins, such as landscaping, renovated floors, or new furniture that will impress potential customers. Use the information from your competitive research to make informed decisions. While it might be tempting to ignore these upgrades to save money, investing in pre-sale upgrades can significantly increase your asking price.
Selling a business can be a tricky process. How to find the right buyer at the right time and price? Almost all shoppers conduct research online before making a purchase (including company purchases). This means that your company should be easy to find on the Internet.
Internet Press and Social Media can Raise Awareness
Amplify marketing efforts like SEO and social media so buyers can find you where they are looking for. Target them even more specifically with an online business registration service, where you will have access to millions of potential buyers. Attracting more people to your ad means creating more press, which will benefit you as a seller.
Work with your accountant to negotiate with potential clients. They probably expect you to backtrack on your initial offer, so you should plan accordingly and work honestly with your buyer.
However, in the end, you have to know your profit and stick to it. Selling a motel is a daunting but profitable process. Follow these tips for an easier, faster, and more profitable transaction that will lead to the best result for both you and your buyer.
Are you a business owner planning to sell your business and need help with an exit strategy and valuation? Perhaps you are considering buying a business and would like guidance with your acquisition. Either way, Murphy Business Brokers in Colorado can help you find a company that suits your needs or can transition your business to the next entrepreneur. We have more than 25 years of experience in buying and selling businesses and service all of Colorado including Fort Collins, Windsor, Timnath, Loveland, & the Greater Denver Metro Area. Contact Murphy Business Brokers now for a free consultation at (720) 292-1627.