The fashion retail industry is a difficult industry to be in. It takes a lot of hard work and long hours and there is a lot of
This is also an industry that goes through a lot of changes as styles and trends come and go with every season and social media has sped up this change by giving us instant access to anything new.
Despite all of this, this can be a profitable business for anyone who has the knack for knowing trends and understanding what it is their consumer wants.
No matter whether you’re selling because you are ready for something new or because it’s time to take a break from retail, this guide will help you through the process of selling your fashion business.
Knowing when to sell your business
The retail industry is changing rapidly, and this might have led you to the decision to sell.
Huge companies like Amazon are looming threats on the horizon and online shopping has become more and more important to the consumer.
All these changes to the industry mean that business owners are having to update their skills by becoming familiar with online selling and brandingin order to adapt how they do business.
It is difficult to know when to sell but it can often be worth selling if you find someone who has the same kind of passion for the type of fashion that you are retailing so that they can carry on your legacy.
Remember, it is never too soon to plan an exit strategy so that you are ready when the time comes to sell.
Preparing your business for sale
You will have to start preparing your business for sale at least two years before you sell it. One of the most important things to do during this time is to make sure that you are not integral to the business.
If your business is going to be of value to someone else, you need to ensure that they will be able to keep the business running and profitable without you.
If the entire stock is chosen because of your particular taste, the new owner may have trouble continuing the business in the same way that you ran it. You should stock the business with fashion that is geared towards your consumer. This will make a handover easier.
You will also need to get your accounts in order and communicate how you have done the accounts to someone that works for you so that this information does not disappear when you leave.
You can also invest in certain cosmetic changes that will make your shop look more appealing to buyers. Spend some money updating your website and making sure you have clothing that is on trend and up to date. Creating an appealing window display with the items of clothing that make your store appealing to your customers and give it a unique quality is also a good start.
Have a look at what other brands that are on trend are doing with their window displays. A lot of clothing shops have moved beyond just a mannequin and included creative design aspects.
Business Valuation, how much is your business worth?
This is a really tricky process so don’t hesitate to get help from a professional. Find someone who has experience in the retail sector so that you can be sure that the value that they are giving you is the correct one.
Your stock and premises and other assets will not be the only things that form the basis of the price tag for your shop.
You will also need to somehow assign a value to the branding that you have built up. Fashion often relies on the way that a customer interacts with the brand more than just the stock. If you have done this successfully over the years, it will be worth something to the buyer.
If your business also has an online sales component, this will add to the value and will need to be factored in when you are valuing your business.
Due diligence when selling your business
This is another area where it can help to get some professional advice. Getting someone who knows the process of due diligence to look over your business before a potential buyer does can help to uncover any discrepancies that are lurking in your books or elsewhere.
Having everything ready for the buyer before they ask can make things run smoothly, the easier the process is for both you and the buyer and the more likely it is that the sale will go through.
How to negotiate the sale of your business
Although you will always be trying to put your business across to a potential buyer in the best light possible, you should also be honest through the whole process.
During the negotiations, remember that you are trying to get to the best deal for both of you.
The time that you have invested into your brand and the passion that you have poured into selecting the right trends and pieces season after season will mean that you are looking for the right person to take over your business so use negotiations to make sure you both get what you want.
Why use business brokers when selling your business
If you do decide to go with a broker rather than to sell privately, spend some time finding the right broker.