Think your business could be unsaleable?
When you started or purchased your business you did so with certain targets in mind. These may have been monetary targets, lifestyle targets or simply becoming independent and not reliant on the whim of other business owners with regard to security of income.
Many business owners achieve exactly that. And we have plenty of examples where the right business with the right owner flourishes.
When this is not the case and the owner finds they are in a business they neither enjoy or can make sufficient income from, the owner can feel trapped and despondent. If you find yourself in this situation you may find you are;
- Working 60 hours a week at far less than the minimum wage,
- The business situation is detrimental to your personal and social life,
- You feel you can’t quit as you have a lease that has 3 years to run and would leave with a large liability.
In fact you are almost a slave to your own dream that has long since vanished.
You may also be thinking that the business is unsaleable and who would buy it?
A few years back we sold a pool shop, that had all the above characteristics. The owners had bought 3 years previously but had discovered that they had no feeling for customer service side of the business and this had driven a loyal customer base away in a slow but steady flow. The lease was $2500 per month and had another 3 years to run. The owners said they were going to fold the business and sell their house to pay off their debts.
After talking them through why we could see value they agreed to list the business for $130,000+stock. We sold it for $125,000+stock.
On the face of it not a lot of money, but effectively this removed the owners from a potential $90,000 lease liability and enabled them to move on with their lives.
We talked to the new owners extensively during the purchase about how they could improve business and what they would do to change the shop. We talked them through the value they were buying;
- Established customer base
- Supplier contacts
- Brand awareness (the shop had been there for 12 years) with 3 different managers
- The lease was relatively good value for the position
- There was plenty of upside!
They came in with a solid plan, making simple changes such as improving the lighting, opening up the interior and making it more open plan and adding an area where customers could wait. 4 years later they have a thriving business, with 3 staff members and the two owners all earning a good income from the purchase.
I am still a customer and became friends with the new owners. They say that the purchase changed their lives for the better and the sellers were able to move on. A win-win situation created from a looming loss that would have left a family in financial stress.