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.

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.

Three People You Need at Closing

Every pawn shop owner has an idea of the dollar value of his or her business, but without the assistance of objective third parties, it is practically impossible to know whether that number is correct.

Selling your pawn shop is an undertaking you should never attempt on your own.  To determine what your business is really worth, at the very least, you will need an accountant, a lawyer, and an exit strategy expert that can perform valuations based on your financial data and the unique characteristics of your shop or shops.

Enlisting the help of outside individuals does not imply that you don’t know your own business or aren’t capable of negotiating your own deal; it just means that you recognize that by enlisting outside help, you’re going to be much more likely to get what your business is actually worth.  Qualified accountants, attorneys, and financial advisors are people that every legitimate business needs at one time or another.  There is no better time to make the most of the qualified professionals and resources available to you than when you’re ready to sell.

Your Accountant

If you have an in-house accountant, use that person to organize your books.  Make sure that in addition to having experience in the pawn industry, any CPA you use is able to advise you on personal and corporate tax matters.

Your Lawyer

You don’t need a lawyer to negotiate the sale of your pawn shop.  (Your exit strategy expert will help you do that.)  However, you do need one to review your closing agreement and leases.  If you are planning on using the funds from the sale of your business to make new acquisitions, you will also want a lawyer to review any non-compete agreements.

Your Exit Strategy Expert

Exit strategy experts like those at Stallcup Group are the people who analyze your financial data, your shop’s tangible and intangible assets, and the current market in order to help you put an accurate value on your business.  At Stallcup Group, our knowledge of how the national pawn companies approach negotiations and the tactics their buyers use to lower sale prices gives us a significant advantage throughout the closing process.  Experience in these areas and an unparalleled number of successfully closed acquisitions set us apart from other financial advisors.

While it may be tempting to sell your shop on your own, the truth is it’s just not worth the trouble.  Before you pick up the phone and call a major pawn company to find out what they believe your business is worth, contact Stallcup Group.  We’ll make sure you won’t ever have to wonder whether your final agreement reflects the very best deal you could have gotten for your shop or shops.