Selling a Pawn Shop Isn’t Like Selling Just Any Small Business

sg14098sdkJust about every book or article on how to sell a business advises business owners to do things like search the Internet for buyers and market their businesses online. This might be good advice for the majority of small business owners, but it’s not good advice for independent pawn shop owners.

If you’re an independent pawn shop owner and you’re not passing your pawn shop or shops down to the next generation or selling out to a partner, your best (and perhaps only) buyer is probably going to be one of the major pawn companies. If you want to sell your pawn shop for top dollar, the last thing you want to do is look up these companies, give them a call, and ask them what they will pay you for your business. Go this route, and you will practically guarantee that you do not sell your pawn shop for anything near what it’s actually worth.

The major pawn companies have been buying independent pawn shops for years, and have gotten very good at it! They have put tools, resources, and processes in place to help them get the most out of each new acquisition. If you don’t have a team on your side that has its own tools, resources, and processes in place, you can quickly find yourself woefully underprepared for what these buyers present to you and ask of you in an effort to drive down your selling price.

Unfortunately, even if all of your financials are in order and you have a solid understanding of your business’s advantages and disadvantages, it can be very hard to combat the analyses that the major pawn companies are able to perform. You need objective pawn shop exit strategy consultants to compile and analyze all of your pawn business’s unique characteristics, combine the information with relevant pawn market information—while keeping in mind the overall economic climate, and then present all of the data in a way that buyers can’t dismiss. Go this route, and you will practically guarantee that you will sell your pawn shop at the best possible price.

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.

Why You Should Obtain a Pawn Shop Business Valuation

sg23497ack0Nearly every financial, real estate, and business seller and acquisition expert on the planet that knows the ins and outs of selling a business will recommend that you get an honest idea of your business’s value from a qualified third party before you attempt to sell.

If you’re a pawn business owner thinking about selling your business, a true expert will tell you that are no exception. Like any business owner, you need to know what your business is really worth before you reach out to any potential buyers. Knowing what your pawn shop is worth will help you determine the value of potential buyers’ offers and give you a realistic picture of what you might be able to achieve as a pawn shop seller.

In order to gain a solid understanding of what your pawn business is worth, you need to know where you stand in the market according to your geographical location and the big-picture pawn market. You also need to have a realistic picture of your current financial situation, financial prospects as a seller, and what your life will look like after the sale of your pawn business. An objective analyst with experience in the pawn industry should be able to provide you with an accurate valuation and see you through the selling/closing process at a rate that makes good financial sense, and is contingent upon the level of success they are able to achieve on your behalf.

Your average business broker, local accountant, or hometown banker may be able to provide you with some valuable insights when you’re ready to sell, but as a pawn broker, you have special needs and requirements that must be met if you are going to sell your pawn shop the right way. Your average consultant, however savvy, is likely to have significant difficulty coming up with an accurate valuation of your pawn shop (or shops).  Most consultants will have even more difficulty presenting you with an accurate depiction of what it will take to gather the right financials and other relevant information that serious pawn business buyers typically want to see before they make a purchase.

Pawn shop owners need more than exit strategy consulting services; they need pawn shop exit strategy consulting services. In order to get the most out of the sale of their businesses, they need to work with third parties that are already working within the pawn industry and have a proven track record of helping pawn shop owners/sellers achieve success.

If you’re considering selling your pawn business, you need a pawn shop exit strategy consultant that can:

  • convert the numbers in your books into pertinent financial information that buyers will find compelling,
  • uncover your tangible assets and intangible assets, and present their findings to buyers in a way that enhances profitability scenarios,
  • work with your current accountant and/or financial advisor to pinpoint any areas of concern and minimize them prior to reaching out to potential buyers,
  • make the right first impression by presenting quantifiable data to potential buyers in a way that puts the ball in your court at the onset of negotiations,
  • understand the legal matters involved in complex sales transactions,
  • understand your reasons for selling and can help you meet your goals, whether those goals include reorganizing your capital structure, embarking upon a new business venture, or retirement,
  • successfully facilitate the sale of your pawn business to the right buyer, and
  • provide post-sale consulting services.

If you’re a pawn broker looking to sell your shop, obtaining a pawn business valuation is the first step towards achieving the sale price you truly deserve. To obtain a free business valuation today, contact Stallcup Group. At Stallcup Group, independent pawn brokers are our business.

What Your Potential Pawn Shop Buyer Really Wants

sg23049801dA potential pawn shop buyer wants to know how much your business is worth now and how much it will be worth once they take over.

Uncovering what your pawn business is worth right now is complicated enough. You can’t just look at your inventory and sales records for answers. You have to look at your geographical location, competitors, licenses, and other assets, tangible and intangible. Then, you have to compile and analyze real data and present it in a way that buyers will understand and find indisputable.

Uncovering what your pawn business will be worth once a buyer takes over is even more complicated.

This is why, if you don’t have the right representation, buyers will almost always have the advantage. Their sole focus is on acquiring profitable pawn businesses at the lowest possible price. If you don’t know what your pawn business is worth and can’t make accurate projections that reflect what it will be worth to buyers after closing, you can bet buyers are going to use your lack of quantifiable data to their advantage during negotiations.

Without the help of the right exit strategy specialist, a pawn shop owner will usually settle on an asking price that feels good, and then go with the buyer that presents the offer that is closest to that asking price—which is usually far below the original asking price. Nevertheless, the average pawn shop owner will go ahead and settle, and even walk away from the transaction feeling relatively satisfied, mostly because he or she either believes that the buyer’s assessments of their business are sound, or simply doesn’t have enough data in hand to dispute the buyer’s assessments.

You would never grant a loan or purchase something based on what your customer tells you it is worth. Why would you sell your pawn shop based on what the buyer tells you it is worth?

Stallcup Group specializes in assessing the value of pawn businesses, whether they consist of one, stand-alone shop or multiple shops. Before you reach out to a potential buyer, contact Stallcup Group for a free pawn shop evaluation. You have nothing to lose—except for the dollars your buyer would have paid if you’d been armed with the right data prior to closing.

Key Questions You Need to Answer Before You Try to Sell Your Pawn Shop

sg238509v3Before you reach out to a potential buyer of your stand-alone pawn shop or multi-store pawn business, there are several questions you need to be able to answer. Here are just a few of the most important ones:

  • How long have you been in operation?
  • How many people do you currently have on staff?
  • Where are you located?
    • What is unique or significant about your location?
  • What are your milestones?
    • What have you been able to accomplish and how did you accomplish it?
    • What were your biggest struggles and how did you overcome them?
  • If a new buyer were to take over, what things might the buyer have the ability do in the future to grow the business?
  • Who are your biggest competitors and how does your business stack up against them?

If you don’t want to waste your time talking to potential buyers of your pawn shop that aren’t really serious, preparation is key. In addition to being able to answer the questions above, you need to have your financials in order and the ability to present them in a way that is attractive and makes sense to buyers. You also have to know the true value of your pawn shop.

Gathering the right financial data and determining the true value of a pawn shop are arguably the two most critical and difficult things any independent pawn broker must do in order to achieve the best possible selling price for their business. Unfortunately, because most pawn brokers enter into the selling/closing process without representation—or, without the right representation—they wind up providing multiple potential buyers with incomplete or unimpressive financial data and simply going with the buyer that presents the highest bid—without ever knowing how much their business is actually worth!

When you have the right exit strategy consultant on your side before you reach out to potential buyers, you can get all of the important questions answered ahead of time. On top of that, you can essentially put an end to old-school bidding wars that in today’s pawn market aren’t particularly beneficial or effective, and start working with the right potential buyer right out of the gate.

Looking for a complete sales preparation checklist? Click here.

Interested in a free pawn shop evaluation from a qualified Stallcup Group exit strategy specialist? Click here.

How to Make Your Pawn Shop’s Storefront Appealing to Potential Business Buyers

sg82309k6k1While financials, purchasing histories, and existing contracts and licenses certainly matter a great deal to potential buyers, they’re not the only things that influence buyers’ purchasing decisions. At their cores, most people are visual people. An off-putting or unkempt storefront can put a bad taste in their mouths even if your pawn shop’s success is well documented. At the same token, a pleasing or appealing storefront can help instill a positive impression of your pawn shop.

A visually appealing storefront can benefit you long before a potential buyer steps foot on your property. Chances are that any serious buyer will view pictures before they trek out to your store. In order for your pictures to look great, your storefront has to look great.

In an Examiner.com article on architectural photography, freelance photographer JoAnne Collinson states that it’s best not to take “the viewer’s eye away from the main subject.” To keep potential buyers’ eyes on the prize, take a good look your storefront as well as at the buildings or spaces that surround your shop before you take pictures (or hire a professional to take pictures).

What can you do to make your storefront stand out? Do you need to repaint your building? If you can’t repaint, can you add eye-popping color and graphics to your store windows?

In her article, “Curb Appeal: How to Get Customers Through Your Front Door,” author Stephanie Bond recommends having: a well-maintained parking lot, professionally-lettered windows, easy-to-read storefront signage, a colorful storefront, using pictures and objects to create additional appeal, and having clean windows and uncluttered displays. All of these things can help make your pawn shop pop—in pictures and in person.

Thinking of selling your pawn shop? Don’t underestimate the power of your pawn shop’s storefront. Having a welcoming storefront can not only help you market your pawn shop to potential business buyers, but help you bring in more customers as you prepare to sell your business. It’s a win-win!

How to Sell Your Pawn Shop and Retire Sooner Rather Than Later

There’s nothing wrong with living comfortably while putting money back into your business—unless you aren’t able to save enough money for retirement while you’re doing it.

Unfortunately, the majority of independent pawn brokers don’t save enough money to retire comfortably. This makes selling their pawn shops for as high a price as the market will bear not only the best possible outcome, but in many cases, the only outcome that will make retiring an option.

Three things that you can do now to prepare to sell your pawn business for an amount that will enable you to retire sooner rather than later are:

  1. Develop an exit strategy that takes into account how much, after taxes, you will need from the sale of your pawn business in order for your family to live comfortably throughout your retirement.
  2. Create a marketing strategy based on financial data and market intelligence that accurately reflects your business’s strengths, and then implement it by presenting your information in a way that appeals to buyers.
  3. Reach out to qualified pawn business exit strategy consultants for support throughout the selling/closing process. A qualified pawn business exit strategy consultant can help you develop your exit and marketing strategies, and then use the data they’ve accumulated to show potential buyers not only how successful your business has been over the course of time, but how successful it will be once new buyer takes over. This can greatly increase your chances of selling your pawn shop or shops at a price that will enable you to retire—and retire well.

If you’re ready to retire from your pawn business, but suspect or have been told that you won’t get enough from the sale of your business to make retiring possible, contact Stallcup Group. You may think that you will have to continue working for the next 10 or 20 years in order to save an amount that will make it possible for you to retire, when in reality, you could be able to retire in a matter of months. Through a free, no-obligation business evaluation, Stallcup Group can help you determine what type of sale price you could achieve if you were to begin the selling process today.

Why Sell Your Pawn Business When Business is Good?

The poor economy has put many small businesses to the test, but thanks to an increased need for quick loans coupled with a larger base of first-time pawn shop customers, many independent pawn businesses are thriving more than ever. They’re in a financial sweet spot, which is why so many of them are surprised when they hear that now might actually be the perfect time to sell their pawn shops.

Why in the world would you want to sell when everything is going so well? Here are three big reasons:

1. Your business is worth a lot right now, which means that you are likely to get a high return on your investment if you sell now. Certainly, there is a chance that your business could continue to increase in value and sell for more money down the road, but there is also a chance that your business could decrease in value. Selling when you are most profitable eliminates the risk that you will get a low return on your investment later—perhaps at a time when you need capital most.

2. Any time anyone, include buyers, performs a business valuation, prospects for future earnings are taken into consideration. When sellers can demonstrate a strong track record of earnings, their businesses become more appealing to buyers and they are able to demand a higher selling price.

3.  This is a time when the largest corporate pawn businesses are looking to acquire independently owned pawn shops in a race to gain greater market share. These companies, which are vying for dominance, have a deep interest in buying you out and have plenty of money to do it.  This race won’t last forever.  Eventually, one of these companies will become the clear winner.  When this happens, it may be considerably more difficult to sell your independent pawn business—much less to sell it at a high price.

If you’re still uncertain about the idea of selling your pawn business while it’s thriving, you might do well to meet with a professional exit strategy consultant that can take into account the unique characteristics of your business, the current market, and other factors, and point out the specific gains you could get by selling sooner rather than later. A simple consultation may be able to help you get enough perspective to make the decision to sell or not to sell a relatively easy one.