See Your Pawn Business From the Buyer’s Point of View

You can never really know whether or not you’re ready to sell your independent pawn business unless you know how much your business is worth—from the buyer’s point of view.

The reason buyers typically have the upper hand is because they have more experience with the sales process.  They’re in the buying business, whereas most pawn shop owners may only sell their businesses once or twice in a lifetime.  Unless you’ve worked for a major pawn company and actually walked in the buyer’s shoes, it is nearly impossible to pinpoint all of the pros on cons that a buyer will take into consideration when looking at your business as a potential acquisition.  Without that knowledge, you’re stuck relying on what the buyer tells you your business worth to their company, which puts you in no position to negotiate the ideal price.

Just as you would never purchase a piece of jewelry at a high price without first appraising it and determining its resale value, you should never sell your pawn business without first analyzing its unique characteristics and determining how much value it could potentially bring to your buyer.

What are your tangible and intangible assets?  How valuable or unique is your geographical location?  What about your physical property?  Do you get a significant amount of foot traffic?  Can drivers easily navigate to your parking lot?  Do you have adequate parking?  What about demographics?  Who are your customers?

If you’re unable to answer these types of questions and prove your answers are accurate with hard data, or simply don’t have time and resources to perform all of the analyses you need to perform in order to determine the true value of your independent pawn business, you need representation.  By working with pawn shop exit strategy specialists who have as much experience with the selling and buying process as your buyers, you will not only save yourself the trouble of having to come up with hard data and perform financial and other analyses yourself, but have a crystal clear idea of what your business is worth from the buyer’s perspective.

You would never sell your home, car, or other big-ticket item without first putting an accurate value on it.  Why wouldn’t you put an accurate value on your independent pawn business before you sell it?

Not Even Thinking of Selling Your Independent Pawn Business? Think Again.

The current market is screaming for owners of independent pawn shops to take advantage of the unique opportunities before them.  These unique opportunities include:

1. the ability to take advantage of the need major pawn companies currently have to gain a larger presence in the market than their competitors,
2. the ability to leverage future earning potential during negotiations with major pawn companies in order to achieve top dollar for independent pawn businesses,
3. the high price of gold and the positive impact it is having on loan balances, and
4. advantages that the Bush-era tax cuts currently allot small business owners (which may end come Jan. 1, 2013).

You don’t have to exit the pawn business entirely to take advantage of the opportunities that are available to independent pawn shop owners right now.  You can use the capital you gain as a result of the sale of your current business to reorganize your capital structure and reposition yourself in the market and potentially do better in the business than you’ve ever done before.

The Stallcup Group team specializes in more than simply getting pawn shop owners top dollar for their businesses.  We specialize in managing negotiations and agreements with major pawn companies in order to ensure that pawn shop owners will be able to meet their future goals.

For example, if you want to reposition yourself to begin a new pawn business in the same geographical area within a relatively short timeframe, Stallcup Group will help achieve a non-compete agreement with the major pawn company that purchases your business that will allow you to reenter the market and get back in business in your preferred geographical area as soon as possible.  In order to do this, we point to the true value of your business, which we are able to uncover through high-level financial and asset-related analyses.

When the market shifts—and it will shift—independent pawn shop owners will not be able to achieve the high selling prices and lenient agreements that they may be able to achieve now with the help of Stallcup Group’s professional exit strategy services.

If you’re uncertain as to whether or not now is the time to sell, contact Stallcup Group.  We will be glad to discuss your goals for the future and provide you with a free consultation.

What Are Your Pawn Shop’s Intangible Assets?

When pawn shop owners are ready to sell, it is often the intangible assets that are the most difficult to uncover and relay to potential buyers.  Some of your shop’s intangible assets might include:

Regional zoning and licensing restrictions.  When local governments prevent the building of new pawn shops in certain areas, the values of existing pawn shops go up.  How much more valuable a shop becomes as a result of zoning and licensing restrictions is difficult for most owners to determine.  Just as it takes qualified realtors to help homeowners determine the right asking price, it takes experienced business brokers like Stallcup Group to help pawn shop owners properly evaluate their businesses.

Close proximity to national competitors.  If you think like a buyer—in other words, if you think like a major pawn company—you’ll understand the reasons buyers prefer to purchase independent pawn shops that are close in proximity to competing shops.  In order to translate that desire into dollars when it comes to the sale of your pawn shop, you have to know the ways in which a large company will change your business model in order to compete with the competitor down the block and across the street, and how much those future changes impact the value of your pawn shop now.

Demographic considerations.  Ideally, major pawn companies want to buy shops that are located in areas that have a high population density or are growing in population at a fast pace.  Other characteristics regarding location, such as close proximity to universities and public transportation hubs, also increase buyers’ purchasing desires.  Buyers will also take into consideration the accessibility of your store.  If customers have to make a U-turn in order to get to your shop, or if parking is limited or difficult, you may have to work harder to achieve your desired sale price.

In addition to intangible assets that have to do with location, a business may have many other intangible assets that are “hidden” or difficult to analyze.  When you’re negotiating with major pawn companies, you should be able to not only list your shop’s tangible and intangible assets, but prove their values.  Do you know what intangible assets would make your pawn shop more valuable to buyers?  Do you know the true values of all of your assets?

Contact Stallcup Group today.  Turning a shop’s intangible assets into data that will influence buyers’ offers is one of Stallcup Group’s specialties.  We’d welcome the opportunity to help you turn your intangible assets into tangible dollars.