Last issue, the owner of a small salon and spa in Winnipeg wrote to ask PROFIT-Xtra readers:
“I want to sell my salon-spa sometime in the next three to five years. I’ve never done much networking, and I don’t have the slightest idea where to find a potential buyer for my company, short of running an ad in an industry publication (and I don’t even know if that’s a great use of my money). Any ideas?”
Best reader responses
Allan Shaw, NEXX Step solutions:
You’ve made the first and most important step in successfully selling your salon-spa by planning ahead, which gives you the opportunity to develop a sound sale strategy.
You say that you don’t do much networking. Not necessarily true! Your clientele and employees are your primary networking source, and you can leverage them to spread the word about your plans. Don’t overlook this valuable resource. The strongest marketing tool is a positive referral from a satisfied customer, for any future buyer will hope to retain your current clientele. In fact, your future buyer might already be sitting in one of your chairs today!
Remember: all too often the most obvious approach is the one overlooked. Yet that usually turns out to be the most effective.
Mark Groulx, A.I.M. Group Canada Ltd.:
My firm A.I.M. Group Canada Ltd. has been selling and financing privately owned companies since 1990. The most likely buyer of your business is another company in your industry. Often it is a competitor, and sometimes it is a supplier or customer. There are also entrepreneurial groups that seek out acquisitions of private companies in numerous industries.
Depending on how small your salon-spa is, you might not be able to afford an advisor on the deal, in which case advertising in a trade magazine would be a good idea. But if you can afford an advisor, you should get help selling your business.
There are firms, such as ours, that specialize in assisting in the sale. That includes preparing the company for sale, organizing selling documentation, doing valuation analysis, putting together a list of buyers, assisting with negotiations and supervising the legal process, as well as a long list of other services. Hope that helps.
Kelly J. Ramsay:
While you certainly could engage a business broker or even a real estate agent to find potential buyers for your business, the most efficient and cost-effective approach is to speak with your professional service providers, such as your accountant, lawyer, or even doctor or dentist. These people might have a direct interest in buying your company, or know of someone who might. Alternatively, you could mention it to some of your clients.
Planning now for this event is wise. And doing whatever you can over the next three to five years to maximize your company’s revenue and profitability will help ensure you receive the best price when it comes time to sell. Good luck.
For his answer, Kelly J. Ramsay will receive a copy of The Practice of Adaptive Leadership: Tools and Tactics for Changing Your Organization and the World, by Ronald Heifetz, Alexander Grashow and Marty Linsky.
Watch for another Peer-to-Peer question in the next PROFIT-Xtra.