b'BUSINESSWho Should You Use to Sell Your Company?There are several professional service providers you should consult to prepare your business for sale.First, have your company evaluated for salability, including establishing a range of values. This can be done by usingthe book value of the company. Since an industry consultant, a businessmost catering companies dont have appraiser or a CPA. Because theamortization and taxes shown on an catering industry is relatively smallincome statement, the actual calculation compared to other hospitality sectors,is based on the reported profit with you are unlikely to find an appraiser orinterest and depreciation added back, a CPA with a lot of experience valuingtimes the agreed-upon multiple. catering companies. Be careful aboutMost buy/sell transactions also allow assuming that a CPA or appraiser withfor some adjustments to the reported restaurant experience will necessarilyEBITDA income. These are expenses understand the catering industry. that the current owner has charged to If you have real estate to sell as partthe company, but a successor owner of your business, in every state in thewould not necessarily be obligated toABOUT THE U.S. you are required to use a licensedcontinue to pay. These must be legal commercial real estate broker to listfor most purchasers to accept them asAUTHORthe propertyunless you are selling theadjustments. Examples might includeCarl Sacks, the managing business and its attendant real estate bygenerous contributions to a pet charity,member of Certified Catering yourself as owner. or excess rent paid to a separate realConsultants, has spent 20 The rules relating to brokeringestate entity under common ownership,years as a consultant to the the sale of a business vary by state.or above market compensation. catering industry. His list of In some states, only licensed realRegarding the multiple of EBITDAclients includes many of the estate brokers may participate inused to value caterers, a larger caterermost prominent and successful a commission or success-basedwill generally be valued at a highercaterers in the industry.transaction. But in the majority ofmultiple. This reflects the inherentSacks is regarded as the states, anyone can broker a sale ofsafety and stability of a larger company.top expert in several catering a business. Consultants and M&AThe average multiple that we have seenrelated areas, including advisors are often used, particularly forin the recent past has been in the 4 tomaximizing financial returns, larger transactions. 5.5 times range for larger caterers, andstrategic planning, and exit For transactions of any substantial3 to 5 times for smaller.strategy development and size, you should expect to have attorneysimplementation; and is also and accountants involved as well.Opportunity Knocks widely known for his expertise If you are planning to sell your company,in contract and venue RFP What Is the Sale Value follow as many of the recommendationsresponse development. In of a Catering Company? listed above as possible. Even if youaddition, he also provides Most catering industry buy/sellare planning to continue to work foradvisory services to both buyers transactions are based on a multiplemany years, a selling opportunity mayand sellers of catering companies, of earnings averaged over the mostpresent itself when you least expect it.and has been involved in many recent few years. The calculation isSince there are many more sellers thansuccessful transactions. To typically done based on a multiple ofbuyers for catering companies, keepingcontact him, email carl.sacks@EBITDA (earnings before interest, taxes,your business in maximally salablecertifiedcateringconsultants.com.depreciation and amortization), plusconditions always is crucial. 58 CATERING, FOODSERVICE & EVENTS cfe-news.com'