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Sellers – 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 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
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.
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