i have a trade shop servicing retailers that i may have to
sell soon due to family heath obligations. any ideas on how to
effectively reach bench jewelers who may be interested?
You probably just did it! I would suggest that you also quietly
talk, as confidentially as possible, to any salaried bench jewelers
whose firms’ overflow you handle since they are the most likely to be
interested. Of course, if the jobs farmed out to you are precisely
because you have skills they don’t then they’re not realistic buyers.
Which raises the major problem, 7 out of 8 small “businesses” cannot
be sold though somewhat more than 1 in 7 can successfully sell their
assets for about their intrinsic value.
I was a business broker for a while in my checkered past (and if I
can find them, and you send me privately your mailing address, would
be happy to mail you a couple of small items I wrote on the process).
Basically you need to have your last 3 years of tax filings in
perfect order with the documentation that supports them. Then, since
tax filings maximize deductible “expenses” you need also to prepare 3
years of “recast” earnings that show what your “real” take from the
business was (e.g., the business owned vehicle also used for family
being a business owner has been good to us ,would like to pass it
on . info on marketing,valuation,and your experience
I’m really glad to hear that the business has been good to you. As
long as—to your customers—YOU are not the business AND your real
take annually exceeds what a similarly qualified bench jeweler would
take annually in salary you have a good chance of selling it. Both of
those could be real sticking points and either one can make a
"business" unsellable*. Your real selling job is to provide ample
evidence to prospective buyers that your business is really
profitable (i.e., making more than salary for your efforts) and that
it isn’t “you.” You also need to know what skills they need so you
can honestly help prospective buyers evaluate the fit for themselves.
That will also help you know when you can hold the note yourself or
must cut the price to get a cash deal. You might also want to offer
yourself staying on for some guaranteed period (say 1-2 years) as
paid part time help if that’s at all practical.
The typical rule is that business sell for from 1.5 to 2.5 times
annual business profits (“profits” is that amount of your real take
above commensurate salary) plus assets**. In assets there are
obviously land and buildings and tools but there also may be value in
your business name—if it’s transferable—customer lists (longer
and more diverse is better, all obvious from the phone book listings
is worthless) and any “trade secrets” you may posses. "Trade secrets"
can vary from marketing methods that clinch deals to secret
repair/fabricating techniques to (non-obvious) sources you use so
look at that carefully and do not divulge those secrets till a
serious offer is on the table and closing is eminent (don’t
exaggerate them either or attorney fees, settlement costs, and
possibly litigation will be in your future!).
*Many small business have a great run and the owner loves them but
their reality is that they provided the owner with independence or
self-control and while those things have real value to the current
owner they seldom can be “sold” since most buyers want some
reasonable guarantee of income ABOVE what they now make with
not-too-much additional grief (e.g., book keeping, etc., etc.).
**Somewhere I probably still have an old annual business broker
compilation of typical sale prices for different types of businesses.
If I can find it (a quick look just now turned up only one business
brokering item but not the book) I’ll look up to-the-trade bench
jeweler service businesses. (On the other hand, a few years ago I
remember looking specifically at the business brokering stuff during
a purge of things “I’ll never need again” so I may have dumped much
or all of it.)
James E. White
Inventor, Marketer, and Author of “Will It Sell? How to Determine If
Your Invention Is Profitably Marketable (Before Wasting Money on a
Patent)” Info Sites: www.willitsell.com www.inventorhome.com,
www.idearights.com www.taletyano.com www.booksforinventors.com