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May 23, 2017    

The Selling Process

 

SellingStores specializes in selling retail businesses. (To sell your restaurant, please go to http://sell-my-restaurant.com) For over 16 years, we've provided brokerage and valuation services for the retail and service industries. We have the experience, expertise and objectivity to answer your business selling questions and concerns. There is never a consultation or an up-front listing fee. We get paid when you get your money. Call us to set up a confidential meeting to discuss selling your business. All information and details of our meeting is discreetly and confidentially handled.

We are aggressive at tracking down qualified buyers.  We have tools on our internet engine that produce information on buyers that brokers haven't even dreamed about let alone have available.  Talk to one of our agents to learn more about our buyer tracking secrets.

Here are answers to the three most frequently asked questions from Seller:

1. How is the value of my business determined?

The value of a business depends on many factors, but the most important are:
 

  • Cash flow: On a nationwide basis the average business with annual seller’s discretionary cash flow (SDCF) of less than $500,000 sells for 2 to 3 times. The variation in ranges depends on a number of factors including type of business, the condition of the business, competition in the area, history on income, brand recognition, and finally the economic climate, etc. SDCF is determined by performing a detailed tax return analysis. The value of businesses in this category is largely driven by the U.S. Government in that the Small Business Administration (SBA), a U.S. government department, is the most used source for financing these transactions and they dictate the price via the amount of money they are willing to lend. Of course, digging into the financials to identify the true owner perks and legitimate add-backs is what SellingStores does best! We are financial experts! The founder is a former Chief Financial Officer for a fortune 20 company.
  • Stability of Earnings & Revenues: Businesses with revenues and earns showing year-over-year growth will command a high SDCF multiple than one showing a decline.
     
  • Value of tangible assets (inventory, equipment, fixtures, etc.): The better the condition of the equipment and facility, the higher the multiple on SDCF.
  • Location and lease: This can add significant value if the location is in a high demand prime location with a lease clearly below market.
     
  • 16+ Years of Experience: After selling retail businesses for 16 years, SellingStores is second to none on valuing and marketing retail and service businesses. Great marketing of a business makes the difference between one that sells for 3 times SDCF and one that doesn't sell at all.

    SellingStores takes the time to perform a detailed financial analysis of your restaurant in order to maximize the selling price. We then advise you on the proper pricing and structure of sale. 

2. What are your fees?

There is no charge for valuing your business if you sign a listing agreement with us. Our fees are set by the demand and selling risks within each area. If we don't sell your business, we don't get paid!

That being said, our valuation methods and our powerful marketing machine usually result in higher sale prices than other brokers can achieve and this higher sales price often exceeds our commission.

For example, a large business owner in Chico, California called SellingStores in order to value and sell their business. The seller had another broker value the business at $625,000 with annual SDCF of about $220,000. Our detailed financial analysis revealed annual SDCF of $307,000. We priced the business at $795,000 and sold it in a matter of weeks at nearly full price. In other words, the seller made more than $150,000 by using our services.

In another example, a boutique business in Folsom, California was valued by a broker at $250,000 and the broker even brought the seller an offer at that price. The seller called us in to evaluate the business. We valued it at $330,000 and sold it in a matter of weeks for close to full price. The seller sold the restaurant for nearly $80,000 higher than the other broker, more than covering our fee.

Focus on the services and marketing your business gets from the broker and not the fee the broker is charging. A good broker can make the difference in getting top dollar for your business.

3. When is the best time to sell your business and how do you get the best price?

Timing is crucial in getting the best price! Obviously, it's best to sell when the business is doing well. If business begins to decline, it will hurt the selling price. However, almost any business can be sold, even if it's not doing well, but it must be properly priced. Our Exclusive Selling Process professionally packages and exposes your business all at once to as many qualified Buyers as possible. This results in the best prices and terms your business can achieve.

4. Will SellingStores disappear after a listing agreement is signed?

So many brokers make promises and when the seller signs the listing agreement they disappear never to be heard from again. SellingStores trains their agents to be responsive to not only to the client, the business owner, but also to buyers. We make every effort to answer the phone the first time. We train our agents to contact our clients at least once every 10 days to provide an update regardless of whether the update is simply nothing is happening. We want you to feel like part of the selling process.

Thank you,

Mel Jones

President & CEO

SellingStores

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