What is in this article?:
- Selling your store
- Setting a price for your store
Expert tips for valuing, pricing and marketing your business
It’s time. You’ve put everything you have into it, but now you’re ready to move on—retire, start another business, maybe even go to work for somebody else.
But just how do you sell the store you’ve owned and operated—not to mention poured the proverbial blood, sweat and tears into—for all these years? How do you prepare it for sale? How do you put it on the market? What price do you place on your business? How do you let it go?
“You have to be ready both emotionally and financially,” says Domenic Rinaldi, managing partner of Chicagoland Sunbelt business brokers. “Ask yourself, ‘Why am I selling the store? Am I truly motivated? What do I need to get out of this to do the next thing?’ On average, it takes six to 12 months to sell a business from the moment you put it on the market. You have to plan.”
Preparing for sale
Ensuring your business is in good shape before you put your store up for sale is key to making a smooth transition from business owner to business seller. This includes:
- Inventory. Jan Fowler, owner of Tampa Bay, Fla.-based Acquisitions Unlimited, says small, independent stores sometimes don’t keep updated inventory lists, but “inventory control is very important.”
- Your store’s physical appearance
- Well-stocked shelves. Fowler advises store owners to remove any out-of-date product from their shelves. “Expired merchandise says maybe the owner hasn’t been on top of things,” she says.
- A list of all your equipment
- Well-trained employees
- Good vendor relationships
- An up-to-date website
- An understandable lease
- Clear, clean financial records. These include profit/loss statements, sales, cash flow, taxes and debt.
In addition, Rinaldi advises, know what your “value drivers" are—things you can’t put a hard price on—including:
- Store location
- How long you’ve been in business
- What niche you serve
- Customer lists
- Key personnel
Finally, get your advisers in place: an attorney and an accountant with experience in selling businesses, a broker if you decide to use one.
Rena Joy Shamie is capitalizing on these principles to help sell her Soothe Your Soul wellness, health and spiritual store in Redondo Beach, Calif., after 15 years in business. The 2,500-square-foot store features about 40,000 items ranging from jewelry, books and greeting cards to essential oils and supplements. She has six employees and 1,000 vendors. The store is in a popular shopping center anchored by a Whole Foods Market.
“I have a huge customer database, a high-traffic website and custom computer software, which tracks vendor information and detailed purchasing records,” Shamie says. “I made it so somebody else could run it with just a small amount of training.”