# How do I sell my business?



## shirleyg (May 3, 2008)

I've been in business for 25+ years. Thinking about selling. I own all machinery (screen printing, embroidery & transfer equipment). I also own the building. (Well, the bank and I own it!)

Where do I start? What's it worth, especially in this economy?

Can I "split-up" the business & sell in parts, such as screen printing separate from embroidery?


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## gerryppg (Jan 29, 2010)

shirleyg said:


> I've been in business for 25+ years. Thinking about selling. I own all machinery (screen printing, embroidery & transfer equipment). I also own the building. (Well, the bank and I own it!)
> 
> Where do I start? What's it worth, especially in this economy?
> 
> Can I "split-up" the business & sell in parts, such as screen printing separate from embroidery?


 The value of the business would be your recievables and the used value of the equipment. It will probably be a very tough sell unless you have an attractive price and turn some nice profits yearly. There has been a couple of screen printing operations around my area that have been for sale for over a year. That tells me the books probably dont look to good.


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## shirleyg (May 3, 2008)

Ugh! That's what I figured. This was supposed to be our retirement.


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## ranchgurl (Sep 7, 2011)

I have a retail western specialty store,everything from home decor to boots....well. I am also thinking of gvetting out of the retail brick & mortar business (I too own my building) . I plan on liquidating the merchandise & fixtures, renting out my building. Eventually, I plan on going mobil with a ne clothing line of t-shirts etc.. and just doing fairs & events. Economy is "yucky". Not a good time to retire. Best of luck...ranchgurl.


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## clclothing (Jul 27, 2011)

Don't forget the value of your client base. Especially if you have a repeat clientele, that can be very valuable to a potential buyer.

There are a number of ways to value a business, including multiples of revenue or profit (or EBITDA). But for the right buyer at the right time, there are other considerations as well, including the fact that while you are wanting to retire, there are an awful lot of people looking to go into business for themselves as an answer to the job market. Some of them have money to invest or the ability to finance.

Look at the number of people joining here every day. You are in a business that is the dream of a lot of people to own.

Don't give up. Speak to a broker about valuation and your local market. And take it upon yourself to talk to people who might be interested.

Just my thoughts...


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## DonR (May 6, 2011)

Post your business on BizBuySell.com.


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## gerryppg (Jan 29, 2010)

If your client base is large consistent customer then it should have value. If you have alot of customers just because you are you, then those customers may not stay with the business. If you have contracts with large customers then that would make it alot more valuable.


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## hoptoad (Sep 21, 2011)

having recently sold another bussiness i can tell you how it worked for me

i got roughly 40% value for my well used equipment 10 % of the value of my stock fair market value for my building (if you are selling a know bussiness with the property value goes up conciderably plus a 15%of a 5 yr average for existing clints(under contract)

t sounds like your well established and depending on location you could do better than that but i got divorced and had to sell


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## hedsteve (Sep 8, 2009)

Have you considered retiring but keeping the business? If you hired a manager to run your business for you a good one should be able to increase sales, pay for themselves and make money for you.


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## TshirtGuru (Jul 9, 2008)

This is one business that is tough to sell. Since the entry level of this industry is fairly cheap compared to others, most prospective buyers often choose to start off buying their own equipment when opening their own store. Or others are just looking to buy used equipment from businesses closing down or selling. 

In my opinion, client base is jack crap. Clients can go to another printer at any time. And as long as you've been in business, the clients you have are familiar with you. It's a gamble for the buyer to be too confident that the clients will stay with a new owner plus maybe even new employees. It's quite different from selling a franchise gas station for instance, although owners change the product stays the same. 

You will most likely only get some value from your used equipment. If you're looking for retirement, you might be better off into looking for a manager. 

I'm speaking from some experience as I'm currently buying another business in a different industry. Plus I've helped sell a few of my dads businesses. My dad owns a few commercial buildings, and there are several stores on that property which he leases out to. He was trying to sell the property, building, and stores together. Buyers were checking it out but wouldn't make an offer. I told my dad to split the listing, stores and property separate. Most investors don't want to get into a new business, they want to invest! The next day my dad got a cash offer for the property! He'll close soon. 

You can list both the business and property together but it could be a tougher sell. I predict if you list the property and business separately, you'll sell a lot faster. Just make sure that the buyer of the property makes an agreement that they can't raise rent to the new owner of the business to a certain % per year for how ever many years. 

Good luck!


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## Louie2010 (Feb 26, 2010)

shirleyg said:


> Ugh! That's what I figured. This was supposed to be our retirement.


 
If this is your retirement income, I would seriously consider this option. Sell the business and equipment separately and keep the property as rental income. 

Of course to be safe I wouldn't sell your equipment until after you have signed a lease with a good tenant.

If you sell the property you will have to pay capital gains tax, and lose a good chunk of the money right off the bat. Then with what is left after taxes you will get a very low return because interest rates are so low. You wont be able to keep up with inflation over the years and your "nest egg" will erode even further with time. 

With rental income you should be able to get a much higher return on your investment, and also keep up with inflation. You will also get the tax benefit of depreciation of the building.


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## shirleyg (May 3, 2008)

My husband and I went to see our Tax guy a couple of weeks ago. He discussed the ugly facts of Capital Gains with us. NASTY! Thanks for your advice!


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## shirleyg (May 3, 2008)

Good thoughts. We'll likely do "something" after the holidays.


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## binki (Jul 16, 2006)

a premium price for this type of business is 2.5 times net plus ffe. you can find books and other references on business valuation.


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## shirleyg (May 3, 2008)

What is ffe?


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## royster13 (Aug 14, 2007)

Furniture, fixtures & equipment


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## shirleyg (May 3, 2008)

Ah...you and your secret codes...  Thanks!


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## RuzCustomTees (Sep 21, 2011)

shirleyg, I know it is a very old post. And that is the reason why I am writing. You must have already sold your business as such a long time has passed. I was wondering how you could handle selling your business. I am also looking for selling my well established business and it would be very helpful if you shared your experience.
Thanks!


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## shirleyg (May 3, 2008)

Nope, haven't sold it yet. The whole process is so overwhelming to think about -- and try to keep the business running. The value has gone down so much since the market crash in 2008. Our business is now about 1/3 of what it was before! Good luck and please post what you do. (I'll do the same.)


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## RuzCustomTees (Sep 21, 2011)

Thank you for such a prompt reply! I will keep you updated..


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## Louie2010 (Feb 26, 2010)

Shirley, Sorry to hear you are having so much trouble selling. I am sure it has been frustrating for you, and I hope something works out soon for you.

Just one thought, although it might not be ideal. Have you thought about offering to owner financing the business, and making signing a long term lease as a required part of the deal? 

This would offer you rental income in addition to the income from the business sale. Of course there is a little more risk because if they fail to pay you will be forced to take it back and once again step back in. However you can hedge that risk a little by requiring a decent down payment, or some form of collateral. Another advantage is you would spread your proceeds of the sale over a longer time which would lower your tax consequences from the sale. Also with interest rates so low right now you could get a higher return with the owner financing because of the added risk you would be assuming. If you do consider that route, just be sure to use a good attorney for the contract, there will be some things needed to be done absolutely correctly in order to better protect yourself.

Just a quick though off the top of my head when I saw your post come back up again.

I wish you well.


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## shirleyg (May 3, 2008)

Thank you so much for your good advise. That would be great if I could find someone who already does garment decorating to step int. But I don't want to make an arrangement such as you describe with a newbie. (We all know the percentage start-ups who fail.)

Otherwise, I will need to sell all the equipment individually. Ugh! 

I haven't really had a "hard time selling" my business, just a hard time actually putting it up for sale. Gotta find out how much the equipment is worth, and the furniture, the clients...

Right now besides keeping the business going, we are cleaning, sorting, counting... we have lots and lots of shirts and hats and ink and wooden frames and foil. Well, you get the picture. 

Again, thanks for your input!


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