The Importance of Being Profitable Before and at the Time of Sale

sg3409u83mPawn shop owners often opt to sell their businesses when the business is no longer bringing in the kinds of profits that they want or need. Unfortunately, selling a pawn business when business is down is not optimal for anyone. The seller usually has difficulty selling the business and winds up getting much less than they would have gotten had they sold when times were better, and the buyer, despite having gotten the business for a relatively low price, has to scramble to figure out how to make the business more profitable in order to ensure that their investment actually pays off.

In a March 2013 Huffington Post article, author Jack Garson explained, “The typical purchaser’s formula is ‘buy, build, sell.’ Buyers start with good companies. If your business is profitable, it tells a purchaser that your company has hit upon a formula for making money. And if your profits are growing every year, it means that there’s a good chance those profits will continue to grow. In fact, experienced buyers count on growing these reliable money-makers.”

The major pawn companies are like typical business purchasers when it comes to profitability. They want to know that they are going to be able to make money and grow your pawn business once you’re out of the picture. When the future is uncertain, they’re not only less likely to make a purchase, but less likely to pay what the business is currently worth if they do purchase it.

Are you considering selling your pawn shop or shops? Increasing profits, maintaining a high income, and having a high number of regular, core customers before and at the time of sale will help you achieve your ideal selling scenario.

For more information on how to prepare to sell your pawn shop or shops, click here to review Stallcup Group’s sale preparation checklist.