The call to ‘shop local’ has been widely made in recent times to save the increasing number of smaller retail outlets in the UK succumbing to serious financial difficulty. For convenience stores in particular, the challenges of operating with stability are ever-present.
Issues include investing in advancing technology and fierce competition from rivals, and if you’re planning to sell your convenience store it’s crucial to recognise and address these problems prior to advertising the sale.
So how might these challenges affect a convenience shop sale and what can you do to prepare in advance?
Market competition has long been an issue for convenience stores, but particularly so since the rise of the discount sector. Creating a unique presence as a convenience shop can be difficult, but one way of doing so is to differentiate your shop from others in the area. An example would be to diversify or collaborate with another local food business if you have sufficient space in your shop - incorporating an in-store butcher, for example, or even a post office.
Convenience stores typically operate with narrow margins, and if there’s also a shortage of capital available it’s not easy to keep up with advancing technologies such as mobile apps, customer reward schemes, and self-service checkouts.
Floor space is typically limited in a convenience store and owners need to carefully consider how stock levels are managed and wastage minimised, whilst also being creative in the way stock is presented.
Our team at Selling My Business are business sales brokers with vast experience in the convenience store sector. How to value a convenience store, identify potential buyers, and navigate through this complex process, are just some of the areas where we can help.
So what can you expect when selling your convenience store, and how can we support you throughout the sale?
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When a convenience shop is put up for sale, initially you need to consider the financial data and other business information that you’ll provide to interested parties. This information is incorporated into a document called the sales memorandum.
The sales memorandum is typically drawn up alongside a non-disclosure agreement that protects business information from competitors or others who may want to derail the process.
A key area of interest for potential buyers is why you’re selling your convenience store. They’ll want to make sure the reasons you provide are open and honest, and by considering exactly why you’re selling you can also identify the most important outcomes from the sale. Clearly, the sale price is crucial, but the speed of the transaction might also be an important factor – if you’re experiencing ill health, for example.
We can guide you through the negotiation stage with prospective purchasers – a stage that’s reached when you narrow down your shortlist to one or two serious buyers. We’ll undertake negotiations on your behalf if necessary, taking close account of your aims and goals.
Once the buyer has completed their due diligence and all parties are happy to proceed, the details are laid out in a Heads of Term agreement. This typically incorporates any warranties and indemnities that have been agreed, as well as the major issues of price and sale timescale.
For more information on selling a convenience store business, please contact our team of experts at Selling My Business. We’ll arrange a free consultation to guide you through the process in more detail, and provide tailored support during what is commonly a complex process.
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