Selling a Business in Taiwan

Hi Forumosans,
here is my topic: I started my restaurant business in Taiwan, Taitung about one and half year ago.
Now I have the intention to move back to my country because of family reasons and I would like to sell my business. Then I am looking for someone with similar experience to can tell me what to do and what do not do.
Someone suggests me to calculate the value of the business to take my year profit and multiply by 3 plus the value of all the machinery and facilities included with the restaurant, some other told me that I am going to be lucky if I can get back the money that I put in the investment and some other recommend to hire someone professional for such a delicate operation.
Considering that now my restaurant is doing well and that the location is one of the most attractive area in Taiwan, which is now developing pretty fast, can anyone suggest me the best strategy to sell out my business?
Thanks in advance to everybody

On tab. Not convenient to answer in depth. My suggestion fwiw do two valuations, one the most you can justify for sale, the other for the least you can expect. Then see what numbers they give you. Choose a number that you best hope for, a number that you would definitely sell for, and what your minimum is.

In two lines you said a lot, I will keep in mind your advice, thanks Obblogatory.

It’s fairly easy to calculate the 1 year future value of a business, so I’d start with that number. Basically, what’s next years expected retained earnings? I think most potential buyers will want this number accurately documented. From there whenever you are discussing it with potential buyers, it’s going to come down to how many years they reasonably expect to recover their investment dollars. For some businesses that number could be as high as 10 - 15 years. For other businesses it maybe less than a year or it’s not going to be worth the risk. Since restaurants have quite a short shelf life in Taiwan and the customer base is quite fickle due to fierce competition, expect offers that reflect anywhere from a 1-3 year expectation of full investment recovery. Anything longer than that is not realistic, despite the current popularity of your restaurant.

If you have any stake in the property itself, milk that for everything it’s worth. If it’s just a lease, then I’d say you should prepare yourself for an offer that’s well below what you personally think it’s worth. Unfortunately, restaurant resale value isn’t where you’d like it to be… Good luck :thumbsup:

You’d have a hard time getting 3x earnings + book for your business. How much do you turnover a year, and how much is your property worth?

The problem with service-based business is that it’s very possible for the business to fall apart once the person providing the service leaves.

Thanks Brent and thanks Mahkie. Yes Mahkie you right, there is high risk the business might fall apart after my departure. Even though my case is pretty peculiar cause the area where I start the business is under development, which means still a few western choice, among those I would say only three worth. I am thinking to offer one or two months training to potential buyer, to also make them confident with their decision.
Of course I don’t want sell off for low value, rather that I just keep going. In one year the situation will get busier and busier…