Optimizing Business Exits
Selling a Rent to Own Business
Over the past few years, the rent to own business industry has seen more than its share of fluctuations in business values. Many sellers have exited their companies under less-than-ideal circumstances. Yet it's still possible to achieve personal and professional goals when selling a rent to own business whem market conditions threaten a successful business sale.
The rent to own business-for-sale marketplace is a nuanced environment, full of pitfalls for sellers who aren't prepared for its demands.
A business sale is always a sophisticated transaction and if you aren't prepared for it, your rent to own business sale could have an unexpected outcome. To stay on course, you'll need sound strategy and meticulous execution on your side.
Broker vs. No Broker
The decision of whether or not to hire a business broker should never be taken lightly. Is there a cost associated with hiring a broker? Sure - about 10% of the final sale prices. But a good broker will make selling your rent to own business much less painful. You can also expect to receive a higher sales price for your business in a broker-assisted deal.
Selling a Rent to Own Business to an Employee
There are both benefits and drawbacks to selling a rent to own business to an employee. A key employee may seem like a natural sales prospect. If you need to sell quickly, the timeframe is condensed in an employee sale because you don't need to track down a buyer. But in many cases, employees expect to get a deal from their employer based on their years of service to the company. Seller financing is one way to get around the capital deficit of an employee-based rent to own business sale, as long as you are willing to vet the employee's credit worthiness the same as any other buyer.
What About Market Conditions?
At first glance, today's market would seem to be a hostile place for rent to own business sellers. Although the economy is gaining steam, recovery is slow and entrepreneurs are holding their cards close to their vests. However, many business sellers don't realize that a full economic rebound can have devastating consequences, particularly if sellers who have waited to list their businesses suddenly create a glut in the business-for-sale marketplace. Like it or not, the time to sell your rent to own business may be right now, as long as your willing to adequately prepare your business for the marketplace.
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