After a massive decline in frozen yogurt industry in the 1990’s, there has been a huge comeback in the in the past decade, with a new generation of flavors and toppings among frozen yogurts shops.
And while most of frozen yogurt franchises specialize in soft-serve yogurt, other franchises offer a little bit of everything, according to the demand, like smoothies, cakes and also pies.
Despite the good moment, there may be some frozen yogurt shop buyers who wants to sell their businesses in order to profit as much as possible while the market is still warm
But do you know how to sell your business for the best price? Check out the following topics and find out.
What is your Frozen Yogurt Shop worth?
In order to know what your frozen yogurt shop is worth, you must rely on at least two main factors: finances and competition.
First, gather all finance information you can find from the past years and compile it to a big and complete report, where potential buyers can find all data they need to make a decision and offer a deal.
Then, make sure you include in the report information regarding your competitors. How is the competitions affecting your business? Are there a lot of frozen yogurt shops to compete with yours?
Take a look at this metrics to make sure you don’t get lost:
- What are the sales?
- What is the profit?
- What are the growth trends?
- What is driving new sales and is that sustainable?
- What channels do new customers come from and what is the breakdown of each channel?
- What is your market position?
- Is your Location favorable?
- How reliant is the business on the owner?
- What systems and processes are in place to run the business?
What makes a Frozen Yogurt Shop worth more?
Here you must ensure potential buyers will notice how your business is worth more than they could possibly think. And how you are going to do that? It’s quite simple: gather all the investments you have done since you opened your frozen yogurt shop and, with the help from a professional business broker, calculate how these investments improved your business valuation.
- Predictable key drivers of new sales
- Stable or growing traffic from diversified sources
- Established suppliers of inventory with backup suppliers in place
- Traffic stats
- High percentage of repeat visitors and repeat sales
- Clean legal history
- Brand with trademark, copyright or legal concerns
- Documented systems and processes
- Growth potential
What does the average Frozen Yogurt Shop sell for?
Since 2005, there has been 127 frozen yogurts shops sold in the United States. It’s not a very big number for a popular business like this one. So why so few shops were negotiated in the past ten years?
According to our research, the answer was already given: it’s a very popular business model, and also a very profitable one. So why owners would want to sell it in the first place?
There are still some sales in the frozen yogurt industry, with an average multiple of 2.27 and average sales price at $158.523, as it’s usually a small business.
What is the most frequent deal size?
Most frequent deal size is $150.000. It’s not a huge number, but at least it’s quite similar to average sales price, so it’s probably what you are going to take from your business sale.
And if you take a look at the chart, you will notice that most of frozen yogurt shops were sold for less than $250k in the past five years, which explain the data above.
Is the Frozen Yogurt market getting bigger?
There has been a very big jump from 2009 to 2010, and since then frozen yogurt shops transactions did not profit less than $1 million.
However, the best year by far was 2014, and if you take another look to the chart, you will see that it was in that particular year when most of sales happened in the past decade.
Still it’s not possible to say that frozen yogurt market is getting bigger, but it’s okay to say that it’s living a good moment and you will probably close a good deal from this sale.
Are bigger businesses worth more?
Yes. The bigger the frozen yogurt shop the higher the profit you will take from its sale.
If you look at the chart once again, you will see that multiple rates are usually higher when the deal size is also higher.
What states have the most business deals?
California, Arizona, Florida and New York are the states you will most likely find a good deal for your business. But it does not mean you can’t get a good negotiation in other states.
Sometimes you can overcome the low number of deals with investors or competitors looking to enter a specific new area, and get lucky with an offer!
Why would you sell in the first place?
The reason to sell always varies from each person. Maybe you are looking for new challenges, businesses and opportunities, or you just want to enjoy your family and retire. Although it can seem tempting to get your hard worked cash, make sure that you are clear on the motives so you don’t regret afterwards.
How long will it take to sell your Frozen Yogurt Shop business?
If you have read all the necessary steps to understand your valuation, and think you have focused on all the topics that make your company worth more, it is maybe time to start the process. Selling your business is a long-term process, and doesn’t happen overnight. Usually companies sell in 12 months, but you can also see deals getting closed in 6 to 9 months depending on the opportunity.
What is the process of selling your Frozen Yogurt Shop business?
This step by step process will help you get less confused when you make sure you are ready and confident to let go of your business, and perform a nice and positive sell. Many entrepreneurs forget about a step, or just don’t have the right guidance to know all the stages necessary and get lost through the process. Don’t forget to go through all of these, and if you have any questions, comment at the end of the article or contact us for more help.
Who will buy your business?
If you are wondering about the buyers that can be interested in your Frozen Yogurt Shop, don’t worry, there are many options and possibilities. From First Time entrepreneurs, to businessmen interested in new opportunities, the chances are that in the frozen yogurt industry it may likely be a person who already had a store in the field.
After a decline in the frozen yogurt industry in the 1990’s, there have been an important comeback in the past ten years. Now it’s a good moment for selling a frozen yogurt shop, as the numbers can show you.
If you want to start accelerating your buyout process, fill out our free valuation form and get your business valued today! Leave your comments on any doubts or feedback, we are glad to hear your thoughts!