The poor economy has put many small businesses to the test, but thanks to an increased need for quick loans coupled with a larger base of first-time pawn shop customers, many independent pawn businesses are thriving more than ever. They’re in a financial sweet spot, which is why so many of them are surprised when they hear that now might actually be the perfect time to sell their pawn shops.
Why in the world would you want to sell when everything is going so well? Here are three big reasons:
1. Your business is worth a lot right now, which means that you are likely to get a high return on your investment if you sell now. Certainly, there is a chance that your business could continue to increase in value and sell for more money down the road, but there is also a chance that your business could decrease in value. Selling when you are most profitable eliminates the risk that you will get a low return on your investment later—perhaps at a time when you need capital most.
2. Any time anyone, including buyers, performs a business valuation, prospects for future earnings are taken into consideration. When sellers can demonstrate a strong track record of earnings and are on an upward trend, their businesses become more appealing to buyers and they are able to demand a higher selling price.
3. This is a time when the largest corporate pawn businesses are looking to acquire independently owned pawn shops in a race to gain greater market share and purchase earnings. These companies, which are vying for dominance, have a deep interest in buying you out and have plenty of money to do it. This race won’t last forever. Eventually, one of these companies will become the clear winner. When this happens, it may be considerably more difficult to sell your independent pawn business—much less to sell it at a high price.
If you’re still uncertain about the idea of selling your pawn business while it’s thriving, you might do well to meet with a professional exit strategy consultant at Stallcup Group that can take into account the unique characteristics of your business, the current market, and other factors, and point out the specific gains you could get by selling sooner rather than later. A simple consultation may be able to help you get enough perspective to make the decision to sell or not to sell a relatively easy one.
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