Can i sell my business?
I own a beauty salon on rented premises and have only had it for a year and half. I didn't borrow any money to start it up, i just built it up as i went along. My first year turnover was about £24,000 and i look set to hit £28000 by the end of this year so although it's not much, it's moving in the right direction. I love it deeply and can see it has potential, but the problem is that i am now on maternity leave and i am finding it difficult to handel the stress. I have one employee. As the business is so young, do you think i could sell it? And how do i value it? I am sure i could negotiate a nice long lease with the landlord for the new tennant.
- wild_eepLv 61 decade agoFavorite Answer
your business is not the premises, it's the combination of client base and staff.
If it's basically you that makes the whole thing work, then by taking yourself out of the picture, you're taking away the value.
Better bet is to shift the workload over to the employee, if they are capable, or bring someone in. In the long term they might buy the business, or might mean you don't need to sell it - you just come back in at the right time as the business is growing and needs more anyway. Beware of two things:
1. choose any new person very very very very very very very very very very very very carefully. Choose wrong and you lose. If you can't find someone you are sure of, don't do it at all. If offering a partnership, make sure it's a partnership for a year from now when you come back and has to be earned by their performance in building up your business.
2. beware that they may just create a name for themselves, and thus be able to take business away from you. Brand the business strongly, and own the brand.
- Luke WarnesLv 41 decade ago
The only answer is if somebody is willing to sell and somebody is willing to buy at an agreed price then it has a saleable value.
Doesn't answer your question, I know, but it's the basic truth so I'll try and add some more...
An accountant once told me the value of a business is 3 years profit, plus any stock value less the cost of putting a manager in for those 3 years - doesn't look like much value according to the figures above. You could increase this value by offering to work for the new concern for a limited period - this would help the new owners establishlish continuity with the clientele.
Have you thought of renting the business to the existing employee? For instance the business makes £200 profit per week so the employee pays you £50 per week for the next 2 years - gives them an easy intro into owning a business without too much capital outlay - could you trust you employee with such a deal when it was drawn up legally with a lawyer.
Renegotiating the lease might not be a good idea until you know exactly what you can do. A renegotiation would probably increase the rent and your liability for that rent.
Have you spoken to a business transfer agent (plenty of them on net)?
- dahliaLv 41 decade ago
I don't think selling it at this point would be a good financial step for you.
take out another line of credit and hire some good people to work for you while you're on leave.
I bet it would be less of a loss to hire more employees than to sell the business all together. do you have family or friends you trust that would manage it for you?
- richmondLv 44 years ago
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- Anonymous1 decade ago
Look on the internet for companies who sell businesses and seek advice from them !!!!!
- Anonymous1 decade ago
Give you a couple of quid for it.