Marketing a Pawn Shop to Multiple Buyers

sg234098lrSelling a pawn shop requires committing to taking on a considerable number of challenging and time-consuming tasks, not the least of which include pricing the pawn shop, marketing it to the right buyers, managing negotiations, and being responsible for the terms outlined in contracts or agreements.

Which task takes the greatest amount of effort to perform depends on the unique attributes and challenges of a particular pawn business, but one thing that’s true for almost all pawn shop owners/sellers across the board is that they don’t anticipate how much effort it takes to properly market a pawn business to potential buyers.

If you’re marketing your business to one or more of the major pawn companies, you’re going to want to show them that your pawn business is scalable; in other words, you’re going to want to prove that your business can grow—not just now, while it’s still yours, but in the future, once the buyer takes over. This can take a lot of time to do, and can be almost impossible to do well if you don’t have firsthand knowledge of the major pawn companies’ inner workings. It’s one thing to make cash flow valuations based on your records; it’s quite another to try and prepare cash flow projections for a monster like EZPAWN or Cash America.

You should also keep in mind that although it’s almost always better to market your pawn business to multiple buyers, dealing with multiple buyers takes a lot of work. It can be all too easy to become so busy responding to buyers’ requests and inquiries that, before you know it, you’re caught up in multiple buying strategies and forking over your selling power left and right. When this happens, numbers start trending downwards. On top of that, the current business suffers. Many pawn shop owners who sell their shops on their own wind up struggling to remain profitable, or even just to keep their businesses manageable, during the marketing and selling/closing processes. Their focus is simply too split to manage both their dealings with multiple buyers and their pawn businesses well.

Pawn shop owners can make things much easier on themselves by enlisting the help of experienced pawn shop exit strategy consultants. While owners may be tempted to think, Why should I pay anything out to a consultant when I am a savvy business owner and capable negotiator, and could keep all the money for myself?, the reality is that exit strategy professionals, in addition to taking the bulk of the tasks associated with marketing pawn shops off of owners’ plates, 9.9 times out of 10, will get owners far more for their pawn businesses than they ever would have gotten on their own.

Shop Talk: The Hottest Illinois Pawn Shop News

It seems that a lot of people in Illinois have been talking about pawn shops lately.

In Waukegan, IL:
The Lake County News-Sun reported on August 22, 2013, that the Waukegan City Council voted five to three to approve a fifth pawn shop license after rejecting the proposal five to three just two weeks earlier.

Scott Kaghan, a former Stallcup Group client, requested the license. Apparently, all it took was little more time for his proposal to sink in for enough aldermen to change their tune.

“Kaghan told the council’s judiciary committee last month that his former business was bought by a national chain in 2010, and he signed a non-compete agreement that expired in July. He told the committee that he had “’nothing but great experience with Waukegan,’” and wanted to open a new shop,” reported the Lake County News-Sun.

Having worked with Scott directly, we were happy to hear that his proposal was accepted, especially since we’d helped him achieve the lenient non-compete agreement he needed to apply for a new license so quickly after the sale of his former shop.

Congratulations, Scott!

Contact us to request a case study on how Stallcup Group helped Scott and his partners complete the sale of their four Chicagoland shops.

In Des Plaines, IL:
According to an article published in the Chicago Tribune on August 9, 2012, a Lake in the Hills resident recently applied to open in pawn shop in Des Plaines, Illinois, which is home to the Rivers Casino.  Earlier this month, aldermen turned down the man’s proposal five to two.

Interestingly, there was apparently talk among the aldermen about the popular show, Pawn Stars, and how it has improved the reputation of pawn shops.  Apparently, not enough alderman regarded the popularity of the show as a good enough reason to grant the Lake in the Hills resident’s request.  Sorry, Pawn Stars!

In all seriousness, it sounds as though the reasons the man’s request was denied had more to do with some aldermen not wanting to change zoning regulations and/or simply not wanting pawn shops in the area at all.

In Elgin, IL:
In another Chicago Tribune article published late June 2012, it was reported that “Elgin officials voted […] to advance plans for the city’s second pawn shop, despite protests from some residents that the business will increase crime and damage the city’s image.”

It was EZPAWN that had applied for a lease.  The four to three vote in favor of leasing space to EZPAWN was based on zoning allowances, the article explained.  In order to move forward, the Elgin City Council will also have to vote to issue EZPAWN a license.

Stallcup Group didn’t find any official announcements or reports in the media regarding the license being granted, but there is a job listing on the EZPAWN website inviting people to apply to work at its Elgin location.

To read the Waukegan article, click here.

To read the Des Plaines article, click here.

To read the Elgin article, click here.