Business Exit Planning
Selling a Musical Instrument Rental and Leasing Business
We hear it all the time: 'This economy is a hostile environment for a business sale.' However, musical instrument rental and leasing businesses haven't been deterred. In fact, we think this economy is a ripe environment for a musical instrument rental and leasing business sale.
Like it or not, a musical instrument rental and leasing business sale is a complicated affair, made even more difficult by the emotions associated with leaving a business you've poured your life into. In our experience, a common owner concern is how the sale will affect customers and employees.
Too often musical instrument rental and leasing business owners fail to receive fair market value for their businesses. With the right strategy, your sale doesn't have to end that way.
Sale Preparation Timeframes
It's critical to properly plan for the sale ofa musical instrument rental and leasing business. 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. Next, the business will need to be documented in professional financial statements and manuals that facilitate the ownership transition. Since all of this takes time and effort, a musical instrument rental and leasing business can rarely be ready for the marketplace in less than six months. However, to command the highest price, you'll probably need to spend one to two years preparing and positioning your business for buyers.
Selecting a Broker
Good business brokers inevitably produce better business sales. During the selection process, look for brokers with a proven track record of successful musical instrument rental and leasing business sales. Take our word for it -- musical instrument rental and leasing businesses are unique businesses and you need a broker who understands how to properly market your musical instrument rental and leasing business to prospective buyers. The chemistry you have with your broker is a consideration. If you don't connect with a specific broker, move on to someone else - even if the first broker looks great on paper.
Tips for Seller Financing
The shortage in today's marketplace isn't interested buyers -- it's capital. Financial institutions have tightened up their lending policies, making it difficult for inexperienced and undercapitalized entrepreneurs to buy musical instrument rental and leasing businesses. As a result, buyers expect sellers to finance a significant portion of the sale. Although 100% seller financing isn't recommended, sellers are financing up to 70% of the sale price to close deals.
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