Tips to Sell Your Dry Cleaner the Right Way
When done correctly and with the right business broker, most business transactions are relatively conflict-less and will prove rewarding for you as the seller. This does not mean that you should not prepare for this moment. Here are some tips that you may find useful to sell your dry cleaner in the most efficient and correct way.
Calculate Your Business Worth
Most businesses will base their value on sales alone and what the seller is looking to get out of the deal, making the valuation a poor calculation that is more likely to drive buyers away than attract them. Here’s a simple formula you can follow to estimate the value of your business:
- Average your net profit in the last 3 years.
- Assess the buyer’s desired rate of return (normally 15% to 30%)
- Based on that, calculate your average net profit to be 15%-30% of that desired rate of return. For example, if your business averages $50,000 net profit, and the buyer wants a 20% rate of return in the first year, your value is approximately $250,000.
- Other playing factors will be equipment, customer base, location, and overall maintenance of the business. These can be better determine by a business broker.
Identify Your Competitive Advantages
In a highly competitive industry as dry cleaners, it is important as a business owner to understand why your customers choose you. If you haven’t already, take the time to identify what makes your business stand out among local competitors. Customer not always choose a business based on price alone. There may be other playing factors that are either bringing you business or costing you business.
Allow Room for Negotiation
Buyers will more than likely be looking at different dry cleaners. Having a full perspective on your financials and your advantages will allow for better negotiation. Always leave some room for negotiation to give your buyers the feeling that you are willing to compromise. Buyers come and go, but they will take a good opportunity when they see it. Make sure you outline what makes your business a great investment for them.
Why Jan Wild?
With over 35 years of experience in buying, selling and advising businesses, Jan Wild will help you in the process of selling your dry cleaner and make sure you don’t miss any important steps along the way. Contact Jan to schedule a free consultation and get the most for your business today.