Sale Preparation Checklist

Are you prepared to sell your pawn shop?

If you were to call up potential buyers today, would you be able to tell them how much your business is worth (and back up your claims with hard financial data), or would you have to rely on them to tell you what they think your shop is worth, and go from there? Use the questionnaire below to evaluate whether or not you’re prepared to speak with parties in the market to buy a pawn shop.

Pawn Shop Sales Preparation Checklist:

Have I determined my priorities, identified hurdles, and taken into
consideration the potential impact of:

caution-gotcha-010313 •   final price,
•   leases,
•   non-compete agreements, and
•   definitive agreements?

Do I know if my target markets include:

•   national chains,
•   regional, privately-held chains,
•   private equity money,
•   my competitor up the street, or
•   all of the above?

Have I determined buyers’ motivations for buying my business?

•   Have I put on the buyers hat and taken into consideration:

– buyers’ perceptions as they relate to underperformance,
– competitor proximity,
– available market share, and
– limited or unavailable licensing?

•   Have I benchmarked my pawn business against others in my area, including buyers’ shops, by comparing:

– loan balances,
– yields on loans,
– gross profit margins,
– lending methodologies,
– demographics, and
– hours of operation?

•   Have I determined the amount of inventory necessary to affect a successful transaction by:

•   projecting future revenue potential and performance based on benchmarks and best practices,
•   determining if demographics support growth model assumptions,
•   taking into consideration expense allocation and normalization, and
•   educating myself on how buyers measure profitably and performance by asking the following:

– Which expenses do buyers allocate at the store level?
– Which expenses are allocated globally?

Am I prepared to negotiate a sales price based on hard data gathered and analyzed prior to entering negotiations?

Am I prepared to negotiate leases (if applicable)?

Am I prepared to negotiate non-compete agreement terms (if applicable)?

Have I developed a proper negotiation sequencing strategy that will ensure a successful transaction takes place?

Let’s not forget two important things:

1. You still have a business to run as you answer the questions above and complete corresponding action items.
2. You can’t rely on those who are in the market to buy a pawn shop to help you reach the selling price you truly deserve.

If, like most professional, independent pawn brokers, you can’t afford to dedicate all of your time to obtaining the optimal price for your pawn business, contact Stallcup Group. The Stallcup Group’s team of professional pawn shop brokers is equipped to manage every aspect of the selling/closing process. We have the tools and processes in place to develop a custom exit strategy for a pawn shop of any kind, regardless of its location.

Another plus? We don’t get paid until you do.