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The 10 Step Process Of Selling a Fitness BusinessSellers – The 10 Step Process:

1. An introductory consultation over the phone where we establish details about your current situation and motivation to sell your fitness business.

2. After our initial introductory consultation, I will request that you complete a Club Profile questionnaire. As part of this process, I will require that you share your financials and other pertinent information to assist in my conducting a valuation of your fitness operation.

3. Once we’ve completed the initial two steps, I will begin to do a full assessment of your fitness business or “Broker’s Opinion of Value” and determine a realistic selling price range. During this process, I may require additional information or may require you to provide other details.

4. After my valuation process is completed, we will discuss the listing prices. I will share market information, and we determine if that price is right for you. Once we establish the sale price, we proceed to sign-off on a listing agreement to begin the process of listing and selling your fitness business.

5. As part of my broker responsibilities, I will write a business profile or a “confidential business review” to present to qualified buyer prospects. This profile is to disclose and share information that helps them make choices and establish interest.

6. At this point, I start the process of getting your business SBA pre-approved for financing. This implementation saves both you and the buyer time and eliminates any unforeseen delays in securing financing.

7. Once those steps are established and completed, I start to post and market your fitness business in a blind ad (to maintain confidentiality) across all of the significant and most prominent websites and buyer databases. I also offer a listing on my website.

8. As your fitness business broker, I handle and manage all buyer inquiries. As part of that management, I request they complete a profile and confidentiality agreement to protect the privacy and identity of both parties.

9. Together, we respond and answer any questions a buyer prospect has and schedule personal tours/meetings with buyers. This format helps the process of selling keep at a pace where the conversion of a sale is fluid.

10. Once an interested buyer makes an offer, I assist both the buyer an seller with the negotiation process. As part of my broker responsibilities, I provide the potential buyer of your fitness business with assistance in acquiring financing. Including, the creation of a purchase agreement and any possible work through contingencies. As the coordinator, I manage the closing process and ensure that all UCC search and documents are executed as needed. My focus is to prevent last-minute surprises, and we have a smooth closing and sale of your business. Congratulations, you have successfully sold your business.

How To Valuate A BusinessHow To Valuate A Business:

Most businesses including health clubs are priced and sold based on a multiple of your “Net Owner Benefit” or “Seller’s Discretionary Earnings”.

The formula is described and explained below:

Net Owner Benefit Selling Price:

Net Owner Benefit Selling Price
0 – $50,000 1 time multiple
$100,000 – $250,000 2-3 time multiple
$250,000 – $500,000 3-5 time multiple
$500,000 – up 4-5 time multiple

How to arrive at your Net Owner Benefit or Seller’s Discretionary Earnings:

EBITDA + Owner Benefit = Net Owner Benefit

Earnings of Biz
Before Expensing
Interest Income
Taxes
Depreciation Expense
Amortization Expense

Take your profit shown on your tax return and add back interest, depreciation, amortization, owner salary, owner perks, & expenses run through the business that a new owner would not incur, plus any non-recurring costs = Net Owner Benefit.

Sellers

  1. Full Business Brokerage Services
  2. Limited Broker or Listing Services
  3. Valuation or Broker’s Opinion of Value

Buyers

  1. Customized Buyer Search
  2. Intermediary
  3. Buyer Agent