Optimizing Business Exits
Selling a Recording Studio
With the economy limping along, many recording studio owners are hesitant to put their businesses on the market. Don't be deterred by economic uncertainty. There are plenty of reasons why this is the right time to put your recording studio on the market.
Intimidated by a sluggish economy, business buyers are more cautious than ever.
If your exit strategy involves selling a recording studio now, sellers need to make a strong case for buyers to purchase at or near the asking price.
What to Expect in a Recording Studio Sale
The sale of a recording studio can be a rollercoaster of emotions. One minute you'll be elated at the possibility of moving on the next stage of your life and the next minute you'll be nostalgic about the memories of your time at the helm of your business. Given your personal investment, you may also experience disappointment in the market's assessment of your company's value. Although it isn't easy, you can mitigate the emotional impact of a recording studio sale by setting realistic expectations before you list your business.
Leveraging Seller Concessions
Seller concessions are becoming more commonplace in business-for-sale transactions. By far, seller financing is the most sought-after concession, especially in the current economic environment. Capital is scarce, causing new entrepreneurs to rely on sellers to finance at least part of the purchase price. If you are unwilling or unable to offer financing, be prepared to offer other types of concessions to close the deal.
Sale Costs
The calculation of your asking price should include a buffer to cover the expense of the sale process. Good brokerage takes a 10% success fee off the top of the final sale price. Professional consultations can also represent a significant expense during the course of a recording studio sale. Furthermore, your time has value, so you may need to include a personal compensation consideration in your expense estimates.
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