Preparing a retail business for sale takes time. There is important work to do long before you list the business with a broker of place your first advertisement. By undertaking preparatory work well in advance, the business sale process will be smoother and the outcome more rewarding.
Here are five essential tips for preparing any retail business for sale. While these tips will not guarantee a sale at the right price and with the timing you want, they will position you and the business for the best possible outcome.
Drive profitability. The sale price off the business will usually be a multiple of profitability over the previous year. If you have enough time, trim costs and do everything possible to drive sales. Every dollar you can add to EBIT (earnings before interest and tax) adds multiple dollars to the selling price of the business.
Be ruthless with expenses. Remember that you are running the business for the incoming owner and not for yourself.
Tidy up. From inside the store to the office, tidy the business, make it more presentable and attractive. Tidy the paperwork. Tidy the employees. Ensure that everything a prospective purchaser will see is attractive and appealing.
Get all of your paperwork in order. Work with your accounts people to get all business paperwork up to date so that any question can be answered and any figure verified. The more easily you can answer financial questions the more your claims about the performance of the business will be trusted.
Ensure that your retail store lease has plenty of time left to run. If there is not much time then the p[rice will be affected.
Make the business desirable. Review all operational processes and eliminate any which are unique to current management. Make the business as simple as possible to operate with any new employees. A business which relies on existing employees or, worse still, the owner, will be considerably harder to sell.
In reviewing the current operation, look at all customer relationships. Are there any which rely on current owner or management personal knowledge or experience. If so, these will need to be addressed.
Develop a business plan focused on growth. People buy a business because of the potential. While they may have growth ideas, it could make the business far more saleable if the homework has been done a growth plan developed to show what upside is achievable and how.
In developing the business plan, work through big dreams for sell my small business. It will be important to show that the retail store for sale is bigger, better and has more potential than the retail store they may be looking at.
The more time you invest in preparing your business for sale the better the outcome you are likely to achieve. Sallow yourself the time necessary to ensure that the business delivers the dream price you want.