There are a variety of reasons you might be considering selling your bridal shop. Perhaps you’re preparing to retire, or maybe you’re relocating your family because you’re in a season of change. Maybe it’s as simple as you’re ready to move on to a new business venture.
Regardless of your reasons, do your best to not rush into a sale. Hopefully, you’ve been planning your exit strategy since the beginning. If not, that’s okay; just take the time to research your options before making any moves.
And above all else, focus on continuing to build your business and improve sales so that you can present a successful and thriving bridal shop to potential buyers.
Preparing for a successful exit
In addition to continuing to grow your business, you need to look at your bridal shop from the eyes of a prospective buyer. Take the time to conduct renovations and repairs. Put on a fresh coat of paint, and update your decor to enhance the ambience.
Also, it’s essential to do the necessary legwork to get your financials in order. This is where it pays to hire a qualified business broker to help you present clear, accurate records of your shop.
This professional touch will give prospective buyers confidence that they’re purchasing a stable and healthy business—ultimately resulting in a better selling price for you.
It’s important to complete a thorough valuation of your shop, including all inventory, furniture, equipment, and decor included in the sale. Once you determine a fair and accurate value, you’ll be able to defend your asking price and engage in negotiations.
It’s wise to seek professional counsel during this stage of the selling process. Not only will experts have a thorough understanding of the current market, but they’ll also know valuable information about similar businesses that have recently sold.
There are a number of ways to value a bridal shop, including the following:
- Discounted cash flow: With this method, your business’s financial growth is projected over the next few years while also factoring in how much those future earnings are worth today. This method assumes that $1 today will be worth more in several years.
- Revenue or profit multiples: Your revenue for the year is multiplied by a factor common to similar businesses in the bridal shop industry. The factor used is dependent on the overall health and success of your business.
- Cost to create: This method considers how much it would cost to build this same business from scratch—recognising that a potential buyer should pay even more than that amount because of the bonus of buying a well-established business.
Regardless of what valuation method is used, a reputable broker will help you place a fair price on your shop and other assets. Plus, they’ll be able to guide you on how to best position your business for success so that you’ll be able to secure the highest sales price possible.
Asking for help
As stated earlier, it’s highly recommended that you seek professional legal and financial advice to ensure your protection throughout the sales process. They will assist you in the following tasks:
- Guaranteeing your books and records are up to date, thorough, and complete.
- Informing you about legal and tax implications related to the sale and looking out for your best interests.
- Weeding through potential buyers so you don’t waste time with window shoppers.
- Ensuring that pre-qualified buyers sign a non-disclosure agreement (NDA) before they are given access to your information.
Conducting due diligence
Due diligence is another crucial step in any business sale. A thorough buyer will conduct due diligence to confirm all information presented in the initial sales pitch and to identify any red flags.
To facilitate this process, prepare the following documents:
- Financial records: Provide at least the last three years’ worth of taxes, bank statements, and profit and loss sheets.
- Financial forecasts and future plans: Present evidence of potential growth as well as future plans to scale your business.
- Corporate structure: Make sure your company is set up in a way that ensures a simple transfer of ownership.
- Key contracts: Prepare a detailed list of suppliers, agreements with designers, and customer database information.
The more prepared and transparent you are with your potential buyer, the more likely you are to close the deal!
Selling a bridal shop that you’ve worked so hard to establish can cause a mix of emotions. You may be excited to embark on a new journey and yet be overwhelmed by the unknown.
To give you peace of mind during this potentially stressful time, we have put together a helpful guide detailing the various steps you will take throughout the process.
We also want to help ensure your exit is a smooth one! Visit here and let us assist you in achieving the successful sale of your bridal shop business.