I've got a hardware store that's been in my family for almost 40 years. Small town, maybe 4,000 people. I'm ready to retire and honestly just want to be done with it. The issue is that nobody local can afford to buy it, and the bigger chains aren't interested in a town this small. Anyone here dealt with something similar? What did you end up doing?
Selling Local
My business is in a small town
have you considered just closing it? i know that sounds harsh but if there's no buyer, there's no buyer. my uncle held onto his shop for 3 years trying to find someone and it just bled Money the whole time
Small town businesses are tough. The buyer pool is basically your neighbors, or someone from out of town who romanticizes 'smaall town life'. The second group is usually a nightmare to deal with because they have no idea what they're getting into.
what's the revenue look like? I mean if the numbers are decent you might find a regional buyer who wants a foothold. Otherwise, honestly, you might be looking at an asset sale. Inventory, fixtures, the building if you own it.
We own the building, which I know is a blessing and a curse. Revenue is steady but not huge, about 600k/year. The building is probably worth more than the business at this point. Which is kind of depressing to admit.
600k a year in a town of 4k people? that actually seems decent. have you tried listing it on one of those bizbuysell sites? might get some interest from someone looking to escape the the city
Careful with the online listing sites. I put my HVAC business on one and got a bunch of tire kickers who wanted 'the books' but were Never going to make an offer. Wasted a year.
TractorSupplyTom's point is underrated. Due diligence requests can eat up a ton of time. Set up a process where they have to sign an NDA and provide proof of funds before you you send anything.
is there a local competitor? sometimes a nearby business owner will buy you out just to eliminate competition, or to expand. Could be worth hkaving a coffee with whoever runs the lumber yard or whatever.
This might be a dumb question but is there someone already working for you that could take it over? A long-time manager? I know a guy guy who sold his auto parts store to his 20-year employee with a seller-financed deal. Employee had no money but he paid it off over a decade.
I actually have a guy who's been with me for 15 years. Sharp, good with customers. But he told me straight up he doesn't have the cash. I hadn't really thought about seller financing for him specifically.
seller financing is probably your best bet if you trust him. you become the bank basically. risky if he runs it into the ground but what's the alternative
I'd get a lawyer to structure it. Don't do a handshake deal with an employee no matter how long he's been there. Seen that blow up. People get weird when they become the boss.
Eh, handshake deals work in small towns more often than people on here like to admit. But a lawyer is still not a bad idea for the paperwork. Just don't overcomplicate it with a 40-page contract.
if you sell to the employee, how does he buy inventory? is that included or does he need a loan for that too? sorry if that's a dumb question
Not dumb at all. Inventory would be part of the deal. I'm not trying to squeeze every last dime out of this. I'd rather see the store Keep going and and my employee get a real shot at it than sell the building to a developer who turns it into a vape shop.
That's a good attitude. But seriously, get a proper valuation on the inventory and the building before you start talking numbers. Otherwise you're just guessing and someone's going to feel cheated later.