Selling an antique shop may seem intimidating, but you can ensure all goes well by learning more about the process and preparing adequately. This review helps you get started with the sale of your antique shop. We offer insights into how you can determine the worth of your antique shop and the sale process.
About The Antique Industry: Is It The Right Time to Sell?
The antique industry engages in the buying and selling of used merchandise, antiques, furniture collectibles, and other goods. Many antique shops have experienced skyrocketing sales due to recent supply chain issues and a slowed U.S. economy. The trend of second-hand purchases should continue for the foreseeable future, leading to an ideal market for antique shop owners. For those planning an exit strategy, now may be an ideal time to sell due to increased demand for used items and the subsequent increase in value for antique shops overall.
How Do I Determine The Worth of My Antique Shop?
As an antique shop owner, you likely are an expert in appraisals and determining value. In some ways, determining the value of an antique item is similar to a business. There is market value based on sales history, but you likely look beyond the financial data to determine the intrinsic worth of an item. The same goes for your business.
Your financial records play a vital role in determining your company’s worth. However, your business broker should look beyond the numbers as well. They should also consider your unique competitive advantage, growth potential, reputational community, and more that may not appear in financial reports. Your geographic location is considered as well. Shops in populated areas are generally worth more due to higher demand and growth potential.
Of course, in other ways, determining the value of your antique shop is much different than other types of appraisals. This is especially the case as a part of an exit strategy, where your goal is to determine a fair market value (how much buyers are willing to pay). One way we determine your company’s value is through acquisition multiples, also called rule of thumb data. This data use recent sales and general rules for determining value. Here are the acquisition multiples for antique shops:
- Antique shops sold between 1.74 to 3.76 times the Seller’s Discretionary Earnings (SDE)
- Antique shops sold between 0.31 and 0.47 times the annual net sales
- Antique shops sold between 2.87 and 3.08 times the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
How Do I Sell My Antique Shop for Fair Market Value?
Of course, as discussed, the first steps are to determine your value and decide if it is worth it for you to sell. Once you are satisfied with your valuation and ready to sell, you can begin preparing. You should collect all of the documents you will need beforehand. This reduces the time between securing a buyer and closing the sale. Notably, you will need these documents:
- Federal tax returns
- Profit and loss (P&L) statements
- Balance sheets
- Inventory lists
- Lease information
Once you and your team are prepared, the next step is to bring your business to the market. However, this is not done publicly. Instead, your focus is on maintaining the confidentiality and finding a buyer through private networks and channels. This is where your business broker shines for you. They utilize access to hundreds if not thousands of potential buyers for your antique shop via networks, databases, and industry connections.
Once a buyer is secured and there is a letter of intent to purchase your company, due diligence begins. During this stage, the buyer may request documents, data, and other information. Their goal is to identify any inconsistencies and potential liabilities that may exist. Of course, the hope for both parties is that there are no issues and that all information is verified quickly. The best way to ensure this is the case is to follow a structured process, and the buyer should already have all information the seller needs to review.
After due diligence, both parties can find a time for closing. This needs to be a date that the buyer, seller, and attorneys for both parties can attend. A representative from the buyer’s financial institution may attend as well, especially if there is financing involved. It is not uncommon for the business broker to attend to ensure all goes smoothly.
Receive Your Free Business Valuation With Sigma Mergers and Acquisitions
You can find out how much your antique shop is worth and start the sale by scheduling a consultation with Sigma Mergers and Acquisitions. We provide you with a no-cost and no-obligation business valuation. So, why wait? Contact us today if you have questions or are ready to get started.
Scot Cockroft is the Owner & President of the #1 ranked Business Brokerage, Business sales and M&A firm in Texas. Scot has been named Named Deal Maker of the Year by Dallas Business Journal.
He is committed to a “different” type of business brokerage firm, one that is NOT about a sales pitch but, rather, results! In short, a business brokerage firm that is committed to performance-based compensation. Scot believes in these principles as well as a candid honesty with clients. His candid style often takes buyers and sellers by surprise, but is often what assures successful connections between the two.
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