Are You Ready to Sell Your Retail Business?

Selling a small business can be challenging to navigate. There are many steps to ensure a smooth transition and optimal profit for a retail company. The industry is growing, so owners are in a great position to sell. Here are some ways to go about selling a retail business to gain a profit.

Why sell your retail business?

Some retailers may be looking to move their focus onto a separate project, while others may be thinking about retiring. This article aims to highlight some of the key points retailers need to consider when asking themselves the question: am I ready to sell my business?

Organise Business Records

Ensure all business records are organised and ready for sale. Messy documents can be detrimental to the sale and delay the process. When records are untidy or missing, owners can appear too involved or uninvolved and set unrealistic expectations for prospective buyers, causing them to back out.

Hire a bookkeeper or accountant to ensure everything is in order before listing or utilise organisation techniques to get stuff prepared. Make checklists and set aside time to file necessary documents to keep things in check. Online filing systems can help store documents safely and keep them structured and in chronological order.

Determine Market Value

A company’s market value is crucial to a sale’s success. Before it hits the market, it’s essential to find out how much it’s worth first. There are a few ways to do this — beginning with tallying the business’s assets.

Ask questions like how much earnings and revenue it expects and how much it generates annually. Ensure you deduct liabilities and debt the business has accrued. Net present value (NPV) calculators can help the business project cash-flow analysis in the future. NPV calculations are complex, so take advantage of online NPV calculators.

Hire a Broker

Hiring a broker has myriad benefits that can help sell a company. Arguably one of the most beneficial attributes is hiring an expert can ensure the seller receives the maximum return on investment. Brokers want the highest commission, so they will undoubtedly reach their highest possible return.

Hiring a broker is an excellent decision when selling a retail business — especially in the eCommerce industry, where business is booming. Brokers allow more time and energy to be spent on running the business rather than focusing on the sale. Frequent updates and communication can help owners and brokers remain on the same page about the sale process.

Time the Sale

Try to predict financial projections and anticipate when the best time to sell will occur. Build the company as much as possible before listing it. Potential buyers will jump at growing businesses but might bypass a good sale if the company is listed at the wrong time, sales are down or revenue plateaus or plummets. Assess the company’s state and do what it takes to present a stabilised front for prospective buyers.

Begin preparing at least one year before selling, although three years is ideal. This allows plenty of time for gathering information, target markets, records and other factors buyers will consider in their decision-making process. Tax returns, asset lists and statements of profits and losses are items to consider sharing with interested parties. A robust financial system for growth and increased revenue could attract many buyers.

Owner financing can be an option if the owner finds a buyer they trust with good standing credit. This can be an excellent option for sellers interested in being a part of the transitional process of the sale or considering involvement in running the business after it sells. Assess the risks and benefits of selling when considering this financing option. The more profitable the company is, the better the deal will be. These factors can also ensure the buying process goes off without a hitch.

Selling Your Retail Business

Selling a retail business is a complex and emotional endeavour for many entrepreneurs. Make the most of the sale with these tips to sell a retail company and move forward, fulfilled and satisfied with the deal.