Article by Frank Lucer
You invested your time, effort, and financial resources into your retail store. You chalked up countless long days and frustrations as the sweat equity that was necessary to realize your dream of being an entrepreneur. You had hoped to one day sell your business and retire in relative comfort. That day has finally arrived.
Millions of independent retailers have discovered that selling their businesses is more complex than it seems. There are numerous pitfalls along the way. Some of them can have a significant influence on the sale price, causing you to leave tens of thousands of dollars on the table.
In this article, I’ll provide a short list of common mistakes to avoid when going through the process of selling your retail store. Some may seem like common sense while others might surprise you. It’s worth noting that all of them have ensnared savvy entrepreneurs.
#1 – Choosing The Wrong Consultant
While you can sell your company on your own, there are many advantages to hiring a consultant to help with the process. That person will work closely with you to find high-quality leads who are serious about buying your shop at a reasonable price. The problem is that a lot of business owners are approached by brokers or consultants who make aggressive promises. The owner hires the first person he or she meets only to discover that person is unqualified for the task.
Interview several consultants before choosing the person who best meets your needs. Ideally, that person should have a strong background in retail and understand what it takes to produce qualified leads.
#2 – Leaving The Marketing To Others
Selling your retail business requires letting the right people know you’ll consider serious offers. You’ll need to take a proactive approach to promote the sale. Your consultant or broker will generate leads, but it’s a mistake to leave the entire task of marketing the sale to that person. He or she does not know your business nearly as well as you do. And while they’ll toil relentlessly to produce potential buyers, they cannot match your enthusiasm and passion.
Call people within your professional network and let them know that you’re selling your store. Offer them a finder’s fee if a prospective buyer they send your way end up purchasing your business.
#3 – Not Setting A Realistic Price
Few things are more important when selling your specialty retail shop than setting a realistic price. If you set it too high, you won’t attract prospective buyers. If you set it too low, you’ll leave money on the table. Many entrepreneurs seem to pull a number from the air and set it to a price tag. They do a disservice to themselves.
Research your market to identify the prices being asked for similar companies. You’ll also want to consider the state of the economy and your monthly profits.
#4 – Jumping At A Poor Offer
When someone makes an attractive offer, it’s tempting to accept it. But, all offers are unique in their structure. Some are an outright sale in which you receive the negotiated price immediately. Others work on a tiered structure in which you receive payments each month for a defined period during which the new owner operates the business.
The latter case is risky, especially if the new owner has little experience in operating a small retail shop. If he or she runs it into the ground, it’s unlikely you’ll receive the monthly payments. You might be able to resume ownership of your shop, but it may be to late to resuscitate it.
An experienced consultant will help you sift through offers based on their individual merits. Take advantage of the advice. With persistence, patience, and the willingness to promote the sale, you’ll eventually find an offer that meets your needs.
About the Author
G.A. Wright specializes in high-impact going out of business sale events that produce big increases in sales volume and attract big audiences. Check out their website for more information: http://www.gawrightsales.com
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