January 22, 2021  
 
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Selling a Formal Wear Sales and Rental Business

Your formal wear sales and rental business has been good to you. The next step is to position your business for the demands of the business-for-sale marketplace.

The economy isn't the only thing that is uncertain these days. So are formal wear sales and rental business buyers, many of whom are waiting to pull the trigger on their next acquisition.
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The economy hasn't squashed the market for formal wear sales and rental businesses. Like always, unprofitable and poorly positioned businesses struggle to find buyers while sellers who have invested time and effort to prepare their sale are being rewarded in the marketplace.

Average Preparation Time

There are no effective shortcuts for selling a formal wear sales and rental business. Since buyers prefer to see evidence of future cash flow, you'll want to to strategically lock in cash flows and increase profits before you list the business. Next, the business will need to be documented in professional financial statements and manuals that facilitate the ownership transition. Since all of this takes time and effort, a formal wear sales and rental business can rarely be ready for the marketplace in less than six months. If you can afford to wait, we recommend investing a few years in improving your business's financial position before you put it on the market.

Tapping Into Business Networks

These days, formal wear sales and rental business buyers are an extremely diverse group with backgrounds in and outside of the industry. To advertise your sale to the widest possible audience, consider a listing on BizBuySell.com or other top online business-for-sale listing sites. But industry connections can also be a valuable source of leads. When leveraging industry relationships for sales prospects, you'll need to be cognizant of the potential for competitors to use knowledge of your sale against you in the marketplace. Use good sense in restricting the flow of information within the industry and focusing your efforts toward trusted industry allies.

Business Valuation

Professional appraisers can use three methods to determine the value ofa formal wear sales and rental business: The income method, the asset method and the market method. 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. Sellers should take note of the fact that all three valuation methods reward businesses that takes steps to increase assets and income.

More Exit Planning Articles

Given your interest in exit planning and in formal wear sales and rental businesses, you might find these additional resources to be of interest.

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The learning process for selling a formal wear sales and rental business is an ongoing journey. Send us your comments and questions, and let's continue the conversation!


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