IBA, as the premier business brokerage firm in the Pacific Northwest, is firmly established as a respected professional service firm in the legal, accounting, banking, mergers & acquisitions, real estate, and financial planning communities. Periodically, we will post guest blogs from professionals with knowledge to share for the good of owners of privately held companies & family owned businesses. The following blog article has been provided by Seth Rudin. Mr. Rudin is a senior business broker at IBA (www.ibainc.com):
How to Prepare Your Gas Station/Convenience Store for Sale
The goal of any commercial sale is to maximize the potential sales price. IBA has experience doing just that when it comes to selling a gas station and/or convenience store. The decision to sell your business can profoundly impact your financial future in the short and long term.
IBA will assist you in achieving the highest valuation for your company. Our process includes careful planning and execution. While preparing the company for sale, mistakes can affect the selling price of your business. Working with an experienced business broker like IBA can reduce those errors and yield a higher sale price. In this article, we’ll explain some of the most important steps that should be taken to ready your business for a quick and profitable sale. The IBA team has sold multiple gas stations and convenience stores in the past year, and we want to share our expertise to assist you in preparing for your exit. Let us help you complete the following steps to help you sell in a timely manner at a premium price.
Step 1: It’s All About the Numbers – Ensure Your Accounting and Financials are Up to Par
First and foremost, buyers care not only about strong financial performance but, more importantly, that the financials are accurate and trustworthy. Buyers want to ensure they understand what they are buying, especially in a business with high day-to-day cash usage. You must ensure that your financial records are accurate, up-to-date, and well-organized. Potential buyers will scrutinize your business’s financial statements extensively. Having clean and transparent records is essential and will assist with a quick sale and less negotiation.
IBA will work with your CPA and bookkeeper to ensure your financial documentation is in order. We’ll collaborate together to gather the relevant documents in advance to help make the due diligence process move more quickly.
Step 2: Enhance Profitability
One of the most significant factors influencing your company’s value is its profitability. Take steps to improve your revenue stream before listing your business for sale. This could include updating your prices to meet the market, cutting unnecessary expenses, and optimizing operations. A profitable and cash-flowing business will attract more buyers and command a higher sales price. As you prepare the company for sale and throughout the time the business is for sale, we ask you to keep your foot on the gas pedal to maximize revenues and the resulting profits. Showing increases helps potential buyers forecast even bigger profits and increases the number of interested buyers.
Step 3: Showcase Your Curb Appeal
Buyers will certainly visit your property to view it for marketability. Potential buyers will examine everything, inside and out. They will monitor how many customers visit and buy gas/goods from the store and see how professional your staff is. Employees should greet all customers entering the store and thank those leaving. To show successful retailing, the shelves should be properly merchandised and fully stocked.
Ensure your team keeps the outside and inside of the store clean, including keeping trash canisters empty and the sidewalk free of clutter and swept. Like the housing market, the “curb appeal” is a buyer’s first impression. Make your business stand out with an excellent appearance! As they say, “You don’t get a second chance to make a first impression.”
Step 4: Streamline Operations with Adequate Staff
Be sure your store is efficient and well-organized. Flowing and seamless operations can make your business more appealing to buyers. Look for opportunities to simplify processes, automate back office work (i.e., reduce paperwork), minimize inventory without jeopardizing your business operation, and improve productivity.
Buyers often pay a premium for companies that run smoothly and efficiently. Showcase the businesses’ ability to run with minimal supervision. Efficiency reduces a buyer’s concern about the time commitment, their knowledge of the industry, and the cost of running the business independently. This means having a strong and well-trained management team in place.
Step 5: Gather Your Key Agreements
Organize your agreements with your jobbers/sub-jobbers, wholesalers, vendors, and key suppliers for easy reference. Review these agreements to ensure they are fully signed and are active agreements. Nothing is worse than delaying a sale because you are operating on an expired agreement or, worse yet, a handshake agreement. You may trust these relationships, but a buyer will not. Take this time to review and negotiate the lowest costs possible.
Step 6: Be Current on Your “Check-Ups” or Inspections
Review your required environmental inspections from the governing authorities, both local and state. If there is an environmental issue, it needs to be addressed promptly and fully to avoid becoming a significant and costly obstacle for the potential sale.
NOW, It’s Time To Sell…..
Selling a business is a complex process that involves legal, financial, and strategic considerations. When you work with IBA, we will assist you with the above steps (and more) to ensure you are ready to sell your business quickly and at the highest price possible. IBA professionals will help you engage the services of other specialists needed, including accountants and lawyers who concentrate on mergers and acquisitions. Together, we will help you navigate the intricacies of the sale and maximize your company’s value.
We also help you consider the timing of your sale. Economic conditions, industry trends, and your company’s performance can all impact the sales price. IBA has done this for years, so we have data that we can use to help determine the best time to sell based on your location and industry.
Are You Ready To Sell Your Business? (Or At Least Contemplate It?)
Then, it’s time to take some action. Maximizing your company’s potential sales price requires careful planning, preparation, and strategic decision-making. By focusing on factors such as profitability, customer diversification, operational efficiency, and professional advice, you can increase the value of your business and attract the right buyers. Selling your company is a significant milestone, and with the right approach, you can achieve a favorable outcome that rewards you for your hard work and dedication. IBA is here to help.
If you have questions relating to the content of this article or the process associated with selling or buying a gas station or convenience store in Washington or Oregon, Seth Rudin would welcome the opportunity to talk with you. Mr. Rudin is licensed to sell businesses & real estate in both Washington and Oregon. Mr. Rudin can be reached at (425) 454-3052 or firstname.lastname@example.org.
IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, real estate, accounting, legal, and financial planning communities on subjects relevant to the purchase & sale of privately held companies and family-owned businesses. IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.