According to U.S. Pet Ownership Statistics, there are approximately 70 million pet dogs and more than 74 million pet cats in the United States. Even though there’s no data regarding the total number of pet-owning households, we can estimate that almost everyone has their own pet.
The same research also demonstrates that cats and dogs are the most popular pets between americans. Then we have birds, horses, fish and rabbits.
So if there’s so many people owning pets, we can assume that there’s a huge demand for pet food, bowls, feeders, toys, beds, crates and other pet supplies and accessories. And where is the best place to buy all of these things? That’s right: pet shops.
If you are a pet shop owner, you’re probably aware that you own a very popular and demanding business.
How big is your pet shop? Does it have a supermarket size or just a small store size? Running a pet shop can be as difficult as running a hypermarket like Walmart, as there is so much variety.
Actually, the whole point of a pet shop is to satisfy all the person’s needs. People go to a pet shop and don’t have to go anywhere else. Everything they are looking for can be found in your business.
So if you’re thinking of selling it, you have to take all into account before setting your price. We’re going to give you some special tips so you can sell your pet shop for maximum value. Take a look at the topics below.
What is your Pet Shop business worth?
Follow these steps and you’ll know exactly what your pet shop is worth:
- Compile all finance reports you can find. Don’t worry, you won’t have to analyze or summarize everything, if you gather the last three to five years of data you’re ready to go. That’s a very important step as potential buyers will ask you questions regarding your sales and profit, so it’s essential you provide interested people with as much information as you can.
- Get to know where your business is exactly located. And by that I mean it’s important for you to understand how many pet shops are around you, if your profit is getting harmed because of the competition, what you are doing to prevent profit losses, so on and so forth. Potential buyers will ask you that as well.
- Which improvements have you done in the past years? Are you a franchise? Do you operate in the internet or only in the physical store?
Make sure you answer the following questions as well:
- 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?
- How reliant is the business on the owner?
- What systems and processes are in place to run the business?
What makes a Pet Shop business worth more?
Now that you started analyzing all the data you gathered, you already know how your business is valued, so you can begin planning on how to make it being worth more.
Providing potential buyers with extra financial data such as growth trends increases interest and, therefore, helps your business to be better valued.
What does the average Pet Shop business sell for?
In the past 10 years there’ve been very few pet shops sales, only 142. That explains why total transaction value in these years was so shy even though pet shops are a very popular business in the United States.
And the profit taken from the sales were not that great either, as average multiple was only 1.08. The average sales price, however, is quite reasonable, over $250k. It can be explained by the fact that most of the pet shops sold are very small businesses.
As you’ll see in the next topics, there were no millionaire deals in the last decade.
What is the most frequent deal size?
The most frequent deal size is $50.000, quite smaller than the average sales price.
Actually most deal sizes were less than $250k, followed by $250-500k, which explains why average multiple is so little, as profit taken by pet shops sales is not usually what most of owners are looking for.
Is the Pet Shop market getting bigger?
Yearly transaction value usually varies from 1 to 5 million. At least this is what happened in the past 10 years. At the same time, number of total sales didn’t change that much either.
But we still can say that pet shop market is living a good moment. Even though business owners can’t take a lot of profit from it, they still are able to make a good deal if they decide to sell it right now.
It’s all about knowing how to value your business and sell it for maximum value.
Are bigger businesses worth more?
Usually it’s what happens, but if you take a look at the chart you’ll see that in the pet shop market there can be some exceptions.
The average multiple is higher if you sell your business for less than $250k than if you do for $250-500k. The only year it didn’t happen was 2012.
So in this case you can profit more if you sell it for a low price, as generally you’ll sell for what your business is really worth.
What states have the most business deals?
Are you wondering where the most deals were made throughout the country, or if your state has a hot market to sell fast? As you can see if you are located in New York or Florida, you may get a lot more offers than if you are in Virginia or Nevada.
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 Pet 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 Pet 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 Pet 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 this particular industry it may likely be a person who already had a store in the field.
Pet shops are very popular among americans, as a lot of people in the United States own pets. However, there have not been a lot of sales in the past 10 years, and most of the businesses sold were small stores, so average sale price is around $250k.
Even though, the pet shop market is living a good moment and if you want to sell your business you won’t get a lot of profit from it, but you’re going to do it successfully.
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 question or feedback, we are glad to hear your thoughts!