Tips for Selling Your Convenience Store in 2015
How to differentiate your business and put your best square footage forward
SAN FRANCISCO -- After years of slow growth during the Great Recession, the business-for-sale marketplace rebounded throughout 2014. Business-for-sale online marketplace BizBuySell.com is on pace to record the most small-business transactions it has seen since it started collecting data in 2007. This improvement, which mirrors the strengthening U.S. economy, is expected to continue in 2015.
Although more activity in the business-for-sale marketplace is good news for owners who have been waiting for a better time to sell, it also means that the marketplace will get increasingly crowded and competitive for sellers in 2015.
Sellers that ready their businesses for sale, put their best foot forward and focus on strategies that differentiate their convenience stores from rest in the area will be more likely to sell at their targeted price. This takes time, however, so start to prepare your store for sale six to 12 months before you actually list it in order to achieve a better outcome.
Selling in 2015
Start by organizing your financial documents. Expect prospective buyers to ask for all financial records from the past three years as it provides solid insight into the business' finances and potential. Tax returns, balance sheets, income statements and cash flow statements are some of the documents that buyers will likely want to see. While tax returns are normally structured to minimize operating profits (and therefore taxes), your other financial documents can help prospective buyers understand the true earning potential of your company. Providing organized financials will build confidence in the buyer that your business is a well-managed one.
Navigating the sales process alone can be quite a challenge. Consider working with a knowledgeable business broker or exit planner, as they can help identify buyer preferences and offer insights into how to make your convenience store more saleable. Brokers can also help determine a reasonable sale price and position your store as an attractive investment to a broad base of buyers.
Here are some other tips to help you prepare for your business exit:
- Differentiate your products or services. In today's marketplace, you have to show how your convenience store is uniquely positioned to dominate a slice of the market. Can you clearly articulate your company's competitive advantage? What makes your store's products or services different? Highly differentiated stores enjoy a much stronger market position than those selling commoditized products or services. As you prepare to list your business, identify and promote the unique dimensions of your offerings. If you're struggling, ask your broker for advice on how to make your business stand out from the competition, as they will know what buyers are looking for.
- Refresh your store's appearance. Prospective buyers often base their first impression of the business on its physical appearance and overall curb appeal. Before you list your convenience store, make sure your store is looking its best. Even simple improvements like a fresh coat of paint, improved landscaping or new shelving purchases can dramatically improve your store's appearance and attract buyers who are looking to avoid tedious physical improvements--but be sure to complete all renovations before any buyers step through the front door.
- Boost your online presence. With a few clicks, buyers can uncover all kinds of information about your business. To manage your online appeal, make sure your company website is up to date, contains accurate information and is consistent with your brand image. If you have a presence on social media sites, invest time and effort into improving your presence and gaining followers--prospects sometimes use the number of social followers as an initial gauge of the company's reach. If there are any negative online reviews of your store, make an effort to respond and convert complaints into positive feedback, demonstrating that your business is committed to providing a positive customer experience.
Lastly, actively monitor market trends and solicit advice from experienced professionals before you list your convenience store. And keep in mind that finding the right buyer for your store can take time. In fact, most experts agree that a realistic timeline to sell a small business is six to 10 months.
Business-for-sale online marketplace BizBuySell.com is on pace to record the most small-business transactions it has seen since it started collecting data in 2007.
While there may be no way to avoid a crowded marketplace in 2015, the best small businesses will still be the ones that win the attention of the most qualified buyers. With some effort, patience and preparation, you can make your listing more appealing to buyers and successfully move on to other ventures in the coming year.
Bob House is general manager for the San Francisco-based BizBuySell.com and BizQuest.com business-for-sale online marketplaces.