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Leveraging Seasonality To Sell Your Business

Seasonal businesses follow a cycle in which activity peaks at certain times of the year. If you’re thinking about selling, there are a few things to keep in mind to prepare to sell your seasonal business at the proper time and for the highest value. Tim Bayley, a Regional Partner with Business Partnership, believes that getting the timing of your business sale right can make a significant difference to the offers you receive, helping you to maximise your profits and sell successfully.  Here, he gives his advice to business owners considering when selling their seasonal business.

Preparation is key to success

Patience is a virtue when it comes to selling a business because the process can often be long and drawn out. However, this does allow you plenty of time to prepare yourself for the sale. The main advantage of selling a seasonal business is that you can use your off-season to get your business ready. With the prices and demand of a seasonal business likely to peak near the start of your busy season, you should start preparing for the sale ahead of time. In the off-season, focus on maximising the value of your business by investing in essential equipment, tackling any potential dealbreakers, and making sure the business is ready to hand over.

No business can be valued on its performance in the last few months of sales or the averages for the year, so it is essential to have monthly or even weekly sales breakdowns to hand for any interested buyers. A buyer could be parting with a large amount of money, so they need to know how reliable your in-season sales are, how they build to their peak and how quickly they decline. For example, this would be gradual for a campsite. Although, if you sell Christmas trees, this peak and decline will all happen within one month.

Timing is key

When you’re ready to sell your seasonal business, one of the most important things to consider is the timing to ensure you get the maximum sale price. For example, if you are trying to sell a campsite or caravan site business at the end of the main holiday season, a buyer has to take into account that they will have little or no money coming in over the winter and part of the spring the following year. Maintenance and improvement work may also take place in the off-season to minimise disruption during the peak season, and this may affect the sale and value of the business. The ideal time to sell a business such as this is typically at the beginning of a peak season as buyers are more attracted to a profitable and growing business and the seller will achieve a higher price

Of course, there are always exceptions. Buyers are unlikely to choose a business that needs improvements at the start of the peak season as they will miss a season of profits. In this case, selling during the off-season can be more effective. However, it is also worth considering whether you can make the improvements yourself so you can sell for a higher price when business is about to boom.

Diversify your offerings

Always look to diversify and evolve your business. Try to bring in new innovative ideas to boost income throughout the off-season. For example, improving your website, creating content for your blog, growing your social media presence, and finding creative ways to reach potential customers. Then push all these buttons once the season heats up again to help grow your database of contacts. You could brainstorm one-off events, services and products that would sit well in your business and fill the off-season income gaps. For example, if your business traditionally supplies wedding hampers, why not introduce baby hampers, Christmas hampers or summer festival hampers to boost income and, therefore, the value of the business.

When it comes to selling your seasonal business, there is not just one season. A clothing business generally has the four seasons of spring, summer, autumn, and winter where the collections change. Gift card businesses can have multiple seasons, with popular celebrations, such as Valentine’s Day, Mother’s Day, wedding season and Christmas. By understanding the seasonality of your business and following these tips, you can significantly increase the offers you receive when selling your seasonal business.

About the author:

Tim Bayley became a Regional Partner with Business Partnership in 2001, covering Birmingham and Warwickshire. Throughout his 20+ years with the business broker franchise, Tim has completed sales for a full range of SMEs, from small retail to larger multi-million-pound manufacturing companies. He understands the practical and personal issues involved in selling a business and provides a personal, professional and confidential service to buyers and sellers alike.

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Business Partnership

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