A short advisory YouTube monologue (Donna Bordeaux / Donna Genie) about preparing to sell a small studio. The speaker recommends getting financial statements and a justified asking price, gently probing employees and loyal customers as potential buyers, and—if those fail—using business brokers (which often require higher-value listings) or listing on marketplaces like bizbuysell.com. She emphasizes clean bookkeeping, accurate customer lists, and tidy inventory/pricing before marketing the business.
Questions this video answers
February 28, 2020.
Typically $15,000 to $25,000.
If the business is worth under about $500,000, many brokers won't take it.
Chapters
So you think you might want to sell your studio. Let's talk a little bit about how that process might work. First off, I always suggest we look at our resources that we have out there and think really hard. Brainstorm about who might be the perfect buyer for your studio. Studio, the first thing that you want to do is to make sure that you are in shape and ready to sell. Ready to sell means you've got financial statements available, you've got support to show why you're asking the price that you are, and you actually have a price in mind that you're looking to sell your studio for. Make sure you can justify that. Alright, let's talk a little bit about the bare bones of how we'd find that perfect buyer for your studio. So first off, think about your customers and think about your employees. From an employee perspective. I know this is a touchy area. You don't necessarily want to go out and tell your employees, hey, I'm going to sell the studio, because they could get a little worried thinking, what's my future here? Should I be looking for something else? So I know you don't want to stir that and create a panic about selling your studio. So we're going to approach this a much more diplomatic and kind of an easy path in. My suggestion is that if you think you have an employee who might be interested or might have and also might have the means to be able to purchase your studio, you have a gentle conversation that might go something like this, hey, you know, sometimes I think I might be, it might be time for me to sell the studio. Maybe there are some other things I'd like to do. Maybe you've got grandchildren or maybe you like to travel, promote those a little bit and just kind of toss the idea out there. Not a hard provision like, I want to sell, do you want to buy? Not that type of a conversation, but more a casual conversation about what it would look like if you sold the studio or what else you might have in mind for your life. Watch their faces. Okay, this is where a little psychology plays the role. Watch their face. Do they seem like that might spark a little interest in them? If it does, maybe you have some further ideas and conversations that you line up with them. If it does not pass. Okay. In most cases, I don't see that employees are your perfect buyer to buy out your studio. Typically, they don't have the means, unless maybe a parent or a spouse may be interested in purchasing the business and helping them pursue that. All right, so if we're not talking about Employee, let's talk about how you deal with this from a customer side. You know that you have some loyal customers who are there all the time. Again, I suggest having that little conversation, that little casual talk, toss it out. Their idea to say, I don't know, some days I think I might be looking to move on and do some different things. I really enjoy traveling, so I really wish I could take some more time to do that. Again, watch the facial expressions. Does it prompt them to ask you some other questions or do they just say ah? Okay, so watch those expressions and use a little psychology to see what their reaction is to that question. That may lead you to a buyer. Alright, so let's back up and let's say there are no employees that you want to sell to. Your customers are terrible. They have no means to be able to buy the studio. What should you do then? Next up, let's go for some basics. There may be a business broker in your area who can represent your studio and sell it to people who are interested in buying a business. Now I will tell you, this is getting more and more rare because brokers are putting minimum levels on their selling. So unless your studio is set out to sell for a pretty significant amount, it may be under the limit. Where most business brokers don't feel it's worth their time and effort. Market your studio to buyers. Typically I see minimum fees for brokerage sales of 15 to $25,000. So if your business is worth under a half a million dollars, many brokers just won't even touch it. It's just not worth their time. Another alternative is the website called bizbuysell.com. this is a website where you can go post a listing out there just from you, from the owner of the business attempting to find someone to buy your business who is not dealing with a broker. Or if they do bring a broker to the table, they would be paying that broker direct. So that's the next suggestion. So while you're in this stage again, remember that your bookkeeping, your financial information, your customer list cleanliness and you're having a good solid inventory series of pricing increases that is consistent. Sell your business like you're selling a car, wax it, shine it up and make it look beautiful. So take those steps. And if you have any questions on how best to get your business in line to sell or if you need assistance with the financial aspects of that, please let me know. I'm Donna Bordeaux with pyopaccounting.com thank you.
