November 14, 2019  
 
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How to Sell to a Business

 

Selling a Grocery Store

It's a misconception that no one is buying grocery stores these days. Savvy entrepreneurs see grocery store opportunities as a path to short-term profits and long-term growth. There aren't any guarantees, but if you adhere to fundamental business sale concepts, you can likely get a good price for your business.

When it comes to selling a grocery store, there are no shortcuts to success.
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In a skittish economy, grocery store sellers can access several strategies to receive fair market value from entrepreneurs who understand the value of a good business investment.

When Is the Right Time to Sell?

If you're feeling like your tenure as the owner of the grocery store is coming to an end, the time to sell is now. There are a lot of naysayers out there advising grocery store sellers (or would-be sellers) to take a wait and see approach. We aren't nearly as pessimistic about the grocery store marketplace. With fewer grocery stores on the market, there are ample opportunities for sellers to capture the attention of qualified buyers.

Brokerage Benefits

There are many reasons why hiring a broker makes sense in grocery store sales. Right out of the gate, brokers know how to help their clients properly prepare their businesses for a sale. Second, a good business broker is a master at confidentiality locating grocery store sale prospects and guiding sellers through negotiations. Typical brokerage rates (a.k.a. success fees) run 10% of the final price - an expense that is usually recouped through a higher sales price and less time on the market.

Valuation Methods

Multiple valuation methods exist for a grocery store. While the income method uses anticipated revenues as a value basis, the asset method focuses on the company's capital, real estate and intellectual assets. In many sales, the most accurate valuation comes from the market method which determines value based on the recent sales of similar businesses. A good appraiser will often use multiple valuation methods to arrive at a reasonable estimate. To drive up your sale price, position your grocery store by improving variables like assets, revenue and profitability during the years leading up to a sale.

More Exit Planning Articles

Ready to learn more? You may find these additional resources to be of interest.

Why Hire an Exit Planning Consultant

Marketing a Grocery Store

Renewing Leases Prior to Selling a Business


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Selling a grocery store is a complex topic, so there's still much more that can be discussed. We welcome your questions, comments and feedback about this topic.


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