Retail business owners will often come to a point where they wonder if their business would sell to another party. While the prospect can be very attractive, the question, "How do I sell my retail business" can be a daunting one.
First of all, it's important to understand that almost any business is sale-able . The key is knowing the proper audience of buyers.
There are buyers of large healthy companies. There are buyers of small healthy companies. And yes, there's even a market for distressed businesses of almost any size, as well.
In fact, distressed businesses can be an attractive target because of their growth potential. This growth potential can be realized either by a new owner, or in many cases, through retail M&A (retail merger & acquisition) – whereby one retail company purchases another that sells similar or complimentary products that make it a good fit.
What's the right time to sell my retail business?
Naturally, this is a question with no perfect answer for everyone. It depends on a number of factors and personal decisions including the age of the owner, succession plans (the desire to pass on your company to children), and enthusiasm and enjoyment of your business; plus economic factors including company health, sector outlook, and future potential.
That said, this has been a very robust period for retail and fashion M&A, as many companies believe there are few better growth opportunities than through a merger or acquisition. Chalk this up to competition and the globalization of fashion and other consumer product industries.
Also, there has never before been such strong demand from financial investors for retail and consumer product business, and especially fashion mergers and acquisitions.
How do I sell my retail business?
Perhaps the greatest tip available for people looking to sell their retail business is to NOT sell it yourself.
Doctors shouldn't treat themselves, lawyers shouldn't defend themselves, and business owners shouldn't sell themselves.
Besides often being limited to a narrow set of potential buyers (ie. Your competitors, suppliers or customers, with none of whom you want to share you plans) the time required to sell a business, and the distraction, can severely disrupt your business and diminish the value of what you have built.
Retail M&A companies do exist, as do smaller, more specialized niche advisers like fashion M&A companies. These companies can help you reach a far broader group of buyers, investors, and attorneys, as well as provide the guidance necessary to help you extract the greatest value out of your acquisition.
These companies can be a great resource and an equally great investment.
Business owners looking to sell a retail business can expect the process to take between 6 and 12 months, including the preparation of financial and business statements, summaries for prospective buyers, detailed "information sharing" for interested parties, negotiation, offer acceptance and documentation, and finally, closing.
While the prospect of selling a retail business can be daunting, done correctly it's often a very rewarding one as well.