Considerations When Preparing to Sell a Pawn Shop

As the annual growth of the pawn shop industry continues to decline, it is becoming increasingly difficult to successfully sell a pawn shop. If you’re preparing to list your pawn shop for sale, ask yourself the following questions to navigate the sales process like a professional.

5 Questions to Ask Before You Sell a Pawn Shop

Successfully sell a pawn shop by making the following considerations prior to listing the business for sale.

1. How will I exit the business?

One of the most common misconceptions among business owners is that you don’t need an exit strategy until you plan to sell. Sunbelt Business Brokers is here to encourage business owners to have an exit strategy in place from the very start. Things you need to consider when planning your exit from a pawn shop include:

• When do you plan to exit the pawn shop business?
• Do you plan to sell the business to an employee? A family member? Competitor? Third-party buyer?
• Does your retirement depend on the sale of the pawn shop?
• Will your employees continue working for the shop under new ownership?
• How will the transition process work?

Once you have an answer to these questions, you’ll be ready to move on to the next step of the sales process.

2. How can I improve my business before I sell it?

To maximize the value of your pawn shop, it’s crucial that you take a critical look at your business. Consider areas that need improvement such as operations, customer base, marketing, real estate, and human resources. Because buyers will be looking for weaknesses during the due diligence process, it’s best to address any concerns prior to listing the pawn shop for sale.

3. What paperwork do I need to gather for prospective buyers?

When prospective buyers begin the due diligence process, they will want to review everything from tax documents and financials to contracts and leases. Consider working with your accountant or lawyer to organize and prepare all the necessary documents.

4. What is my business worth?

To pinpoint an asking price, it’s ideal to obtain a professional valuation. Valuation methods vary, but a professional service will be able to analyze risk, cash flow, and more to determine what your business is truly worth. With a professional valuation, you’ll be able to defend your asking price.

5. How do I find buyers and close a deal?

The best way to find buyers and a close a deal in optimal time while continuing to run your pawn shop is to hire a business broker. Business brokers have an extensive network of contacts interested in acquiring businesses. Plus, business brokers have the resources to properly market a business and pre-qualify buyers.

To learn more about how to sell your pawn shop, contact your local Sunbelt office. We look forward to helping you sell in optimal time and for top dollar!