Optimizing Business Exits
Selling a Remnants Retail Business
Business-for-sale markets are susceptible to a variety of influences. As you know, the remnants retail business industry has seen more than its share of fluctuations in business values. Many sellers have exited their companies under less-than-ideal circumstances. Yet it's still possible to achieve personal and professional goals when selling a remnants retail business during challenging economic times.
The buzz in the marketplace is that now isn't the right time to sell a remnants retail business. Consequently, sellers are holding their businesses off the market until they are sure the market will sustain their asking prices.
To achieve your goals, you'll need to know the market as well as key business selling techniques. As a business seller, you need to go into the process with the mental goal of presenting your business in the best possible light.
Valuation Methods
Professional appraisers can use three methods to determine the value ofa remnants retail business: The income method, the asset method and the market method. While the income method uses anticipated revenues as a value basis, the asset method focuses on the company's capital, real estate and intellectual assets. In many sales, the most accurate valuation comes from the market method which determines value based on the recent sales of similar businesses. As a safeguard, consider conducting appraisals using variations of multiple appraisal methods. Sellers should take note of the fact that all three valuation methods reward businesses that takes steps to increase assets and income.
Post-Sale Details
As your remnants retail businesssale nears completion, there is a lot of work remaining to be done. Handing over the keys and saying goodbye to your employees is easier said than done, and requires thoughtful consideration prior to closing. Ideally, these and other post-sale details should be addressed early on. But if you haven't dealt with them yet, it's important to have a frank conversation with the buyer, your broker and other professionals as soon as possible.
Average Preparation Time
Preparing a remnants retail business 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. 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 remnants retail business 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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