Like it or not, an apartment hotel sale is a complicated affair, made even more difficult by the emotions associated with leaving a business you've poured your life into. In addition to the personal enjoyment you received from the business, you probably have concerns about what will happen to the people who made your apartment hotel a success.
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At Gaebler, we're seeing apartment hotel sellers succeed by applying sound sales principles combined with a refusal to be intimidated by a down economy.
Signs You're in Over Your Head
Many apartment hotel are tempted to save brokerage fees by selling their businesses on their own. Although there are exceptions, solo sales typically take longer and are less productive than brokered sales. As a rule, no business should sit on the market for more than six months without attracting the interest of at least a handful of qualified buyers. Lack of buyer enthusiasm or persistence indicates that something is wrong. If that occurs, it's time to bring in the professionals to get your sale back on track.
Why Confidentiality Matters
In the business-for-sale universe, publicity translates into risk. A low-key selling strategy is a low risk activity because you can control who does (and doesn't) know that your business is on the market. When and if your sale becomes public knowledge, competitors can use that information to weaken your position in the marketplace. Although it can be difficult, it's important to strike a balance between confidentiality and sale promotion. Brokers and consultants can mitigate the risk by implementing confidential sale techniques.
Sale Preparation Timeframes
Preparing an apartment hotel sale takes time. Since buyers prefer to see evidence of future cash flow, you'll want to to strategically lock in cash flows and increase profits before you list the business. You'll also need to create financial reports, operations manuals, and other documents to create the perception of a turnkey apartment hotel operation. Since all of this takes time and effort, a apartment hotel can rarely be ready for the marketplace in less than six months. A more likely scenario is that it will take more than a year to create the conditions necessary to receive the maximum sale price.
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