Business Valuation for Selling a Furniture Store
In 2024, the market value of furniture stores is $147 billion according to IBIS World. More furniture store owners are choosing to sell because of increasing home renovations. Because of this, selling a furniture store can be a profitable decision. However, it must be approached tactfully. After all, the goal is to make the most money possible from the sale. This is why getting a valuation for selling a furniture store is essential.
A professional valuation is a must if you plan to sell a furniture store. A valuation can help you learn how to increase the value of your business and attract the right buyers. With so much riding on a profitable sale, you will want a trusted appraiser on your side.
Peak Business Valuation is a company that values furniture stores across the United States. We can provide a professional business valuation for your furniture store. We are also happy to answer any questions about selling or valuing a furniture store. Get started today by scheduling your free consultation below!
What Is a Furniture Store Business Valuation?
First things first. What is a business valuation and why is it important? A business valuation is the process of determining how much a business is worth. When valuing a furniture store, appraisers focus on financial performance, assets, and earning potential. This helps determine the fair market value of a furniture store. A furniture store valuation will help you set the right price, attract serious buyers, and address weaknesses.
In this article, we will explain why a valuation for selling a furniture store is important. If you have questions, schedule a free consultation with Peak Business Valuation today!
Understanding Your Furniture Store’s Fair Market Value
When determining how to value a furniture store, appraisers use various valuation methods. Three common approaches are the market approach, the income approach, and the asset approach. At Peak, our business appraisers often use the market and the income approach to value a furniture store.
- The market approach compares your store to similar stores that have recently sold. Valuation experts will use market multiples to come to this conclusion. Learn more about multiples at Valuation Multiples for a Furniture Store.
- The income approach focuses on how much your store earns and future earning potential. This requires a deep-seated analysis of the furniture store’s financial history. Check out How to Value a Furniture Store for additional information.
Both methods help determine the fair market value of a furniture store. However, deciphering this information without a professional can be tricky. At Peak Business Valuation we are happy to answer any questions about valuing a furniture store. We want you to feel confident in your listing price and store optimization. Reach out to us today for a free consultation!
Maximizing the Value of Your Furniture Store
In addition, if you want the best price when selling, it is wise to take steps to increase the value of the furniture store first. Most buyers will not want to buy a business they think has little value. As the furniture store owner, it is up to you to make the store more appealing to buyers. Many sellers choose to improve operations, customer service, and the store’s appearance.
Part of the valuation process includes a value driver assessment. Value drivers are factors that help increase a furniture store’s value. One value driver is location. Locating in a highly populated area can increase foot traffic and sales. Setting pricing alternatives for different financial classes can also be helpful. In addition, consider strengthening your store’s online presence. Read Value Drivers for a Furniture Store to learn more.
Identifying Risks When Selling a Furniture Store
Next, a valuation for selling a furniture store includes a risk analysis. This analysis helps you spot potential problems that could hurt the sale. Knowing the risks lets you address them to make the store more appealing to buyers. At Peak, our appraisers take an in-depth look at risks. Some common risks when selling a furniture store include:
- Declining sales or profits: If sales are dropping, it can lower a store’s value.
- Dependence on key employees: If you lose important employees, it can affect the business.
- Unresolved legal issues: Legal problems can scare potential buyers away.
- Inventory issues. Excessive unsold inventory can hurt the store’s value.
- Strong competition. If your area has many competitors, it can negatively impact your furniture store’s sales.
When valuing a furniture store, a business appraiser will identify key risks in your furniture store that impact the value. Understanding these can help you take a proactive approach to mitigating them. Thereby increasing the appeal to potential business buyers and thus the furniture store’s value.
Setting a Realistic Price for Your Furniture Store
Moving on, when selling a furniture store, you will need to set a realistic listing price. This is one of the most important parts of the process. Buyers will be turned off by too high of a price and you could lose money if it is too low. Luckily, a furniture store valuation helps to solve this problem.
A valuation for selling a furniture store makes determining a price a breeze. When you create a fair price, this builds rapport with the buyer. Setting a fair price shows that you are realistic and honest. This helps make the selling process smoother and more transparent.
Peak Business Valuation can help you determine an attractive listing price for your furniture store. As expert appraisers, we are confident we can help you in the selling process. Reach out to us today! We are more than happy to answer your questions about how to value a furniture store.
Utilizing the Valuation Report When Selling a Furniture Store
After the business appraiser completes a furniture store valuation, they will give you a valuation report. This report highlights a store’s worth, market conditions, and growth potential. Using this report in the selling process can give you a great advantage.
A valuation report gives you clear details about the furniture store’s value. It also gives you the data needed to prove the value of the furniture store. When you meet with a buyer, you can use this report to back up your listing price or other claims. As such, it is extremely beneficial when negotiating the sale of a furniture store.
Preparing for a Furniture Store Business Valuation
Finally, before getting a valuation for selling a furniture store, you need to be prepared. The process will go along much smoother if you compile important documents ahead of time. Some common documents needed for a furniture store valuation include:
- Financial documents. The business appraiser will request balance sheets, income statements, and tax returns for the last three years.
- Proof of store operations. Buyers want to know that your store is running well, so make sure everything is in good shape.
- Asset List. Compile a list of all physical assets. Examples are inventory and equipment.
See the full list of needed documents at Documents Needed for a Business Valuation.
When you are ready for a furniture store valuation, it is important to work with a trusted appraiser. To avoid any mistakes and losses, consider speaking with a trusted business appraiser at Peak. Peak Business Valuation is here to help you make the most of your furniture store sale. Contact us today!
Conclusion
If you are preparing to sell a furniture store, a furniture store valuation is essential. A valuation for selling a furniture store can give you the information needed to see eye to eye with buyers. In it, you will learn your store’s value, how to improve it, and how to set the right price. This knowledge can help you get the best deal and make the sales process easier.
Peak Business Valuation is ready to help you through the business valuation process. Schedule your free consultation to start valuing a furniture store today!
Schedule Your Free Consultation Today!
