Convenience Store For Sale, Sound Interesting?
“Thinking About Buying A Convenience Store? We Can Help You Avoid Some Common Pitfalls.”
Companies are looking for new opportunities of increasing their cash flow. In some case the cash flow for the business could have plateaued as their no new revenue streams. They do this to diversify their portfolio and hedge off potential risks in their current markets. To get more money they go to other sources. These sources could include investing in stocks and shares. This has turned out to be profitable as seen in the TV show Shark Tank but there are companies who would like more than just shares but would like to acquire the whole company.
The reasons why they would want to buy a whole business is that it is costly to start up a business from scratch and they wouldn’t want to make the potential teething mistakes that are bound to happen. Here are a couple of tips for the company that is looking to buy a business. Especially if the business is looking to buy a convenience store.
Where to look
This is normally the biggest challenge to any company that would like to buy a new business. There are many websites out there that are involved in buying and selling of business in Ontario but very few of them give all the information that you require. When looking for a convenience store for sale you are better place to go to trade publications and commercial investment magazines. These two sources turn out to provide all the necessary information that the company would require to see whether the business is indeed profitable or not.
In addition there are commercial brokers who have specialized in buying and selling convenience stores and would be able to tell you the value of the business to the dollar. With their in depth knowledge they will tell you which business to acquire and the ones to go over.
Type of business
The types of business are broken down into two, either a franchise or independent store. Both of these types of stores have their advantage and disadvantages. Some of the main advantages of a franchise store over the other is that they have a proven track record, your potential clients are familiar with the brand, and there is support and training from the parent company. The disadvantages are is that there is little autonomy and most of the supplies you get are from the same source giving you a smaller competitive advantage.
On the other hand independent stores have more culture, freedom, personality and no fees or royalties to pay for as part of the advantages of owning them. The disadvantages are that it would cost more to advertise as it is unknown brand and client acquisition is more expensive.
Evaluating the business
This is one of the more important point when coming to buy a business. You should know key metrics of the business like sales, profit, costs, liabilities and assets. These figures will tell you how well the company is doing and how it will operate in the future when you decide to buy the business.
Other than figures, there are other items that you should know about especially when buying a store. One of the things that should be considered is store location. This is important as it will determine how much foot traffic the store will be getting and that determines the sales gotten. The location also will affect how items will be delivered to the store. This tells you how much it will cost you to get new stock.
How much to pay
After everything has been looked at one of the last things to determine is how much to pay for the convenience store. No two stores are alike as some stores have one benefit over the other and a disadvantage to it. Stores in Ontario are going for as high up as CAD 1,000,000 while there are others that are as low as CAD 30,000. The average of these stores come to around $150,000. As each store would be different determining the actual price of it is sometimes difficult and you will have to get professional help from certified accounts and business brokers. They would help you determine how much each store is worth and how much you would make at the end of it all. Of course you will need to a quality convenience store for sale to make sure its worth while.
As there is plenty to consider when taking on a new venture the advice presented in this blog post will get you on the way of getting your dream store!
Want more information on how Convenience stores? Check out https://en.wikipedia.org/wiki/Convenience_store
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