Two Ways To Sell Your Business " A Letter To The Editor " By: Christopher Lynch, Co-CEO Daniel Lynch Sales Company

Furniture World Magazine

For your readers who are attempting to sell their furniture store, I offer the following opinion. There are two ways to sell a retail business, but only one way to sell it at a profit. 1. Transfer of Ownership: This is used to sell a business intact, to another person who intends to continue the same business activities. When an economic appraisal is made, the wholesale cost of merchandise is discounted. Nobody will pay 100 cents on the dollar for floor sample inventory when they can purchase brand new inventory for the same amount! Furthermore, the reputation and goodwill of the business is difficult to evaluate and is often eliminated altogether. Generally, banks and lending institutions are not willing to loan money for these types of ventures. In many cases, the new owner defaults on the terms of the sale and the seller reclaims possession, with the business in declining financial condition. Or, the new owner has a liquidation sale whereby the inventory is sold out at retail prices, keeping and benefiting from the proceeds that the seller worked so many years to obtain. 2. Complete Close Out Sale: This approach is used to sell the assets and inventory to the high paying buying public at retail prices. For those store owners who are retiring or going out of business, this transaction creates a profit scenario amounting to the recovery of the cost inventory investment plus a profit of 30% to 50%. When a store owner sells the real estate separately from his inventory, he is maximizing his capital investment while getting the best of both worlds. In conclusion, a well planned Complete Close Out Sale creates larger profits and hard cash, far more than the actual value of assets. Whereas, a buy-sell agreement leads to a smaller return on investment which diminishes ones retirement fund.