A price that’s too high will make buyers think that you don’t understand the market and are overvaluing your pawn shop. A price that’s too low is bad because, well, it will most certainly result in a lower payoff than you deserve! Arbitrarily deciding on a price that’s somewhere in-between your highest imaginable price and lowest imaginable price isn’t a good idea either because it’s not a compromise based on facts; it’s guesswork.
How, exactly, is a hard-working pawn broker supposed to come up with the right price for his or her pawn shop?
There are many, many things that go into determining what price you should put on your pawn shop or shops, which is precisely why you need as much support as you can get when you’re planning or ready to sell.
Lenora Chu, a CNNMoney.com contributing writer, suggested in a 2009 article on pricing small businesses, “If you’re serious about selling, the best first step is to consult with a business broker or investment bank to evaluate the specifics of your business and determine an appropriate multiplier.” For most small business owners, this would be perfect advice, but if you’re an independent pawn shop owner, you’re probably going to need the assistance of professionals who use a financial methodology designed specifically for pawn shops in order to come up with the right selling price. Exit strategy consultants like those at Stallcup Group have a proven financial methodology in place that enables them to valuate pawn businesses appropriately.
In addition to providing you with a pawn business evaluation that reflects the true value of your shop based on your financials, tangible and intangible assets, and a number of other factors, pawn shop exit strategy consultants can help you develop an entire sales and marketing strategy that will allow you to locate the right buyers and put the right information in front of those buyers. They can also help you navigate through every step of the negotiations and selling/closing processes.
While you can certainly come up with a price for your pawn shop on your own, it’s not advisable. Your price isn’t just a dollar amount, but a reflection of your entire sales strategy. Going into buyer negotiations with the wrong price can be catastrophic. It’s an exit strategy consultant’s job to make sure that you go into negotiations with the right price and walk out with the best possible price you could get.