Arm Yourself with Pawn Shop Business Selling Knowledge

sg2304v98ajIt is now more important than ever for pawn shop owners to arm themselves with selling/closing knowledge.

Most pawn shop owners don’t put a lot of thought into selling their businesses when they’re just starting out. Nevertheless, a pawn shop’s typical business cycle and the rate at which the major pawn companies are buying independent pawn shops show us that most pawn shop owners will sell—perhaps sooner than they might have originally predicted.

If you’re a pawn shop owner, whether you’re planning on embarking on a new business venture, reorganizing your capital structure, or hoping to retire, you should know exactly where you stand as a potential business seller at all times. If and when the right opportunity to sell comes along, knowing precisely what you want and need and where you stand in the current marketplace will prepare you to do everything you’ll need to do to get the highest possible return on your investment and honor all of the hard work you’ve put into your pawn business.

Below are some questions that you should be able to answer long before you actually engage in the selling/closing process.

  • Why are you selling?
  • What physical and intangible assets are you selling?
  • Is it the right time to sell?
  • Do you have to sell?
  • What is your pawn business worth to you?
  • What is it worth according to your objective pawn valuation?
  • What is it worth to a potential buyer?
  • Is your business ready to be sold?
  • Does the way your business looks appropriately reflect its value, or could/should it look better?
  • Are your financial and other records up to date?
  • Can you account for every piece of inventory?
  • Are all of your agreements and licenses current?

Finally, the most important question you need to ask and answer is: Do you have the right pawn shop exit strategy consultant to assist you throughout the selling/closing process?

Even if you’re not thinking of selling your pawn business any time soon, there is no time like the present to prepare to sell. The one certainty in life is that nothing is certain. You never know when the opportunity to sell might come along. When it does, you’ll be much more likely to make the right decisions if you’ve done yourself the service of arming yourself with selling/closing knowledge ahead of time.

Click here to review Stallcup Group’s sales preparation checklist.

Shop Talk: New Proposed Meltdown Regulations for Pawn Brokers, Secondhand Jewelers

sg23490ibqPawn Times reported yesterday that a bill that proposed that pawn shops and resellers of precious metals wait 30 or 60 days before melting down any jewelry was amended after business owners complained to a rep at the House of Representatives. According to Pawn Times, the bill now proposes that pawnbrokers and secondhand jewelers wait 10 or 15 days, depending on their participation in a data collection program.

In related news, a March 30, 2013 article by Mike Shedlock on TownhallFinance.com reveals that another bill that might be of particular interest to pawn brokers is scheduled to be voted on soon. Explains Shedlock, “The bill, which advanced in a 4-2 vote by a House committee Monday, states that gold and silver should be legal currency not subject to tax or regulation as property.” He continues, “The Republican-led Senate gave the bill its blessing in February in a 17-11 partisan vote.” Democrats are opposed.

To read the full Pawn Times article, click here.

To read the full TownhallFinance.com article, click here.

Do I Really Need an Entire Year to Prepare to Sell My Pawn Shop?

sg3409up3qWhen pawn shop owners want or need to sell their shops right away, they quickly learn that selling is not just a matter of putting their pawn businesses on the market, calling up potential buyers, and waiting for the bids to come in. It typically takes a lot of preparation.

In a February 2013 Entrepreneur article, Brad Sugars, founder and chairman of ActionCoach, states, “If you’re looking to sell right away, you probably won’t get full value, as it takes a good year of preparation to sell before you actually put your company on the market.”

At Stallcup Group, we agree with Sugars’ statement—so long as it applies to business owners who are attempting to sell in the absence of solid representation.

When you have the right representation; that is, when you have the right exit strategy specialists in your corner, it doesn’t have to take an entire year or more for you to sell your pawn shop or shops. Perhaps more importantly, you don’t have to prepare to sell for an entire year or more prior to putting your pawn business on the market only to achieve a selling price that is unimpressive or doesn’t reflect the true value of your business.

Experienced pawn shop exit strategy consultants can help you get the highest possible return on your investment in your pawn business by accurately identifying its value and creating and implementing a plan of action that will enable you to increase your business’s value prior to reaching out to buyers—and do it quickly.

If you’ve been considering selling your pawn business, but aren’t sure how to go about selecting the right representation to help you do it, Stallcup Group suggests you start by asking your potential exit strategy consultant the six questions below.

  1. What information do your pawn business valuations typically contain?
  2. Are you able to determine not just how much my pawn shop is worth now, but to forecast what it might be worth to a buyer after the buyer takes over?
  3. How do you obtain, manage, and turn complex financial data and licenses and agreements into actionable information?
  4. How can you drive value to my pawn shop or shops?
  5. What are your established business marketing and selling/closing processes?
  6. How will working with you help me get a higher return on investment in my business than I would get if I were to sell my business on my own?

If your goal is to sell quickly and at a price that reflects your pawn business’s true value, partnering with the right exit strategy consultant is going to be paramount. The six questions above should help you determine whether or not your potential exit strategy consultant has got the right stuff.

New Reasons to Consider Selling Your Pawn Shop

sg2309u4luStallcup Group has published many blog posts on the reasons why today’s pawn shop owners should consider selling their businesses. The main reason has been that it’s been a seller’s market for some time now, thanks to soaring gold prices and the race between the major pawn corporations to buy up the majority of the market (i.e., as many profitable independent pawn shops as possible), and other market-related factors.

We’re glad to be able to report that it’s still a seller’s market. However, there have been some recent shifts in the market that indicate that things may be changing.

In an April 3, 2013 blog post, Bank Notes made the claim that pawn shops are “looking second-rate.” Why? According to the post, falling gold prices and the lowering shares of at least one major pawn corporation indicate that pawn shops aren’t doing as well as they were a couple of years ago.

The Bank Notes blog post cites some sobering statistics from a representative at the Employee Benefits Research Institute that are also worth sharing. Apparently, 20 percent is now “the share of people that will retire with more than ten years in savings.” In addition, $250,000 is now “the average sum that a couple will spend on out-of-pocket health care expenses during retirement.”

If you’ve been putting off selling your pawn shop or shops, these statistics coupled with the recent shifts in the market may give you the final reasons you need to take the leap and begin implementing an exit strategy now.

Not sure where to start? Click here to request a free, no-obligation pawn business evaluation from Stallcup Group. You can also call 214-396-4070 to speak with a Stallcup Group representative directly.

To watch a recent CNBC video on the current state of gold on the Stallcup Group blog, click here.

To read the Bank Notes blog post in full, click here.

Pawn Shop Valuations That Benefit Sellers and Buyers

sg20940sjkMost pawn business sellers, like other business sellers, believe that their shops are more valuable than their potentials buyers do. This is why it is so critical for pawn shop owners to obtain a pawn shop valuation from an objective source.

When you are armed with an accurate valuation, you can prevent yourself from becoming locked into negotiations that aren’t really negotiations, but conversations that don’t go a whole lot further than, “Well, I think this is what my pawn shop is worth,” and, “Well, we think this is how much your pawn shop is worth.”

When you and the buyer can’t point to solid data, you have no common ground from which to start a fact-based discussion. As a result, you usually either wind up settling on a price by meeting somewhere between your two price points, or just walking away from the negotiations table altogether.

A lot of pawn shop owners, and especially pawn shop owners that have never sold a pawn shop before, assume that a pawn shop valuation is just a document that reflects their current financial situation. In actuality, while a pawn valuation does include a detailed analysis of your current financial situation, it contains so much more. It should, in addition to estimating the economic value of your pawn business, estimate what the economic value of your pawn business will be after the sale of your pawn business is complete. In other words, it should enable both sellers and buyers to predict with great accuracy what the business will be worth as soon as the new buyer takes over—and what it could potentially be worth down the road.

Considering selling your pawn shop? Click here to request a free, no-obligation pawn shop valuation from Stallcup Group today.

Shop Talk: Gold Still Falling; Is the Gold Trade Done?

It would be premature, or just plain wrong, to assume that the gold trade is done. At least, that’s what Peter Schiff, CEO of Euro Pacific Capital, seems to be saying in a CNBC video report released just yesterday. Nevertheless, with gold having two losing quarters in a row and the dollar staying strong, traders, gold dealers, pawn shop owners, and many others are concerned.

What does Schiff think? Schiff predicts that gold isn’t going anywhere. Says Schiff in the video below, “And, in fact, if you remember, gold did really well going into the last financial crisis. Maybe it’s-it’s appropriate that it’s doing poorly going into the next one, because I think the crisis that we’re headed for is much worse than the one in two thousand and eight, and I think it’s gonna be a very good environment for gold.”

Focusing on the Pawn Shop Buyer’s Wants and Needs

sg23u9idn0a“I swore I was going to exclusively collect assets and not liabilities for the rest of my life. I swore never to take gambles I couldn’t back up, or that I couldn’t afford to lose. And, I’ve stuck with that ever since.” –Tim Blixseth

The above quote from famous American real estate mogul Tim Blixseth speaks to business buyers, but perhaps sellers should consider what it’s saying to them as well.

Why?

Think about it: If what business buyers really want is to know that their business acquisitions are going to pay off and pay off well, the task of business sellers must be to prove that they will.

Too often, independent pawn brokers that are trying to sell their businesses become so focused on trying to figure out what the sale of their businesses will mean for them that they forget that their first job is to serve their customers, i.e., their potential business buyers.

In order to serve the customer and prove that the business acquisition they’re considering making is going to pay off and pay off well, there are four things every pawn shop seller needs to do.

  1. Perform a fact-based analysis of their business.
  2. Target the right buyers.
  3. Package their analysis in a way that will make sense and appeal to buyers.
  4. Effectively market their businesses up to the point of sale.

Pawn brokers that remember to consider the buyer’s wants and needs as they market and sell their pawn shops will always have a much better chance of reaching a closing agreement from which everyone can walk away feeling satisfied and prepared for the future—whatever that future may hold.

Shop Talk: Macau Pawn Shops Critical to Local Casino Market

sg23u85vl6Bloomberg.com recently reported that pawn shops in Macau “help fuel a casino market that’s six times the Las Vegas Strip by enabling the mainland Chinese who crowd the gaming tables to sidestep China’s currency controls.” How are gamblers using pawn shops to bypass controls? Gabriel Chan, a financial analyst, is quoted in the article as saying, “‘To skirt the cap on yuan they can take out of China, gamblers buy expensive goods from pawnshops using debit cards and trade them in for cash at the same store.’”

To read the Bloomberg.com article in full, click here.

Five Questions Pawn Shop Buyers Want Answered

sg139048la3Pawn shop buyers look at your business as an investment. They want to know not just what your business is worth to you, but what it will be worth once they take over.

To sell your pawn shop at a price that reflects not only what your business is worth now, but what it will be once a buyer implements new operations, you have to be able to provide pawn shop buyers with information that will make clear exactly how their investment will pay off in both the short and long term.

What does a pawn shop buyer want to know?

Five of the most common questions pawn shop buyers ask are:

  1. How will implementing my operations improve performance and increase sales?
  2. How will my approach to outdoing nearby or local competitors increase profitability?
  3. Why will purchasing this particular pawn shop be to my advantage, considering the current market landscape?
  4. What licenses and agreements does this pawn shop have (or not have) in place that will present me with more (or fewer) opportunities right out of the gate than I might be able to find in another pawn shop acquisition?
  5. What will my profit margins be three, six, nine, and twelve months down the road? What are they likely to be in the long term?

Answering these types of questions isn’t easy for any busy pawn shop owner. An exit strategy consultant with experience in the pawn industry can help you respond to pawn shop buyer questions that require research, study, and analysis to answer. If spending a significant amount of time providing complex answers to pawn shop buyers’ questions is something you can’t afford to do, the pawn shop exit strategy consultants at Stallcup Group can provide you with the support you need to remain profitable throughout the selling/closing process.

For a comprehensive pawn shop sales preparation checklist, click here.

Dissolving Pawn Shop Partnerships

sg02349isflDo you have one or more partners? If you’re lacking solid partnership agreements and/or the ability to buy your partners out, giving your partners certain incentives that will give them the opportunity to back out of your professional relationship gracefully and profitably is going to be key if you want to move forward, whether moving forward includes branching out on your own in the pawn industry, starting a new business venture, or edging towards retirement.

To grant partners incentives in the right way, you should not only seek out a good lawyer, but a good exit strategy consultant who knows the ins and outs of the pawn industry and can help you determine your best options.

Why do you need an exit strategy consultant with experience in the pawn industry?

Most lawyers, however savvy, don’t have a lot of pawn industry experience. When you get an exit strategy consultant with experience in the pawn industry involved in the dissolution of your partnerships, you stand a much better chance of gaining the market intelligence you need to not only successfully dissolve your partnerships, but to sell your pawn business, if selling your business turns out to be the best way for you to move forward.

An exit strategy consultant can also help you determine the true value of your business and help you navigate the murky waters of dissolving complicated a partnership in a way that enables you to achieve the highest possible price for your independent pawn business. In general, even lawyers that have significant experience in the sale of businesses don’t have the pawn industry experience, pawn market intelligence, pawn-specific financial methodologies, and existing relationships with pawn shop buyers that will result in an optimal selling price and closing agreement.

If you’re an independent pawn broker looking to dissolve a current partnership, contact Stallcup Group.  Stallcup Group’s experienced pawn business exit strategy consultants can help you meet your future goals and dissolve partnerships without compromising profitability.