How to Value and Sell a Hardware Store
Many consumers are loyal to certain types of businesses, including grocery stores, auto repair shops, and hardware stores. If a customer receives great service and the prices are reasonable, the store can drive repeat business with their reputation.
Hardware stores are particularly attractive to buyers, particularly in an improving economy with a high demand for homes. Hardware stores that provide great service are profitable businesses.
The Market For Home Improvement
Lowe’s and Home Depot believe that the home improvement boom during the pandemic will continue. Here’s why:
Required maintenance: Approximately 50% of U.S. homes are older than 40 years, and require an increasing amount of repairs.
Housing prices have increased due to increased buyer demand. Homeowners are more willing to invest in their homes, since they are increasing in value at such a high rate.
Widespread use of the COVID-19 vaccine may increase the number of homeowners who decide to start home projects
There are factors that may make your hardware store particularly attractive to a purchaser.
What Drives A Hardware Store’s Value?
A potential buyer wants a business that has a track record of success, and a store that can grow sales after the purchase. Here are some factors that can make a hardware store more valuable:
Hardware stores that have been at the same location for decades are more likely to drive repeat business since they already have brand awareness in the community. Stores that offer ample parking with well-lighted parking lots are attractive to consumers, and many shoppers prefer smaller hardware stores and try to avoid Lowe’s and Home Depot.
Online Sales Presence
Stores that offer both physical stores and online purchasing are in a better position to succeed. Online retail sales increased 44% in 2020, and online spending represented 21.3% of total retail sales in 2020. Online sales should be a part of your strategy.
Stores can serve traditional in-store shoppers, as well as those consumers who prefer to purchase online. Some customers may keep purchasing online after the pandemic, and you will be able to easily serve those clients.
An online presence helps you attract new customers, because many buyers search the web before visiting a physical store, or before ordering online.
Formal Marketing Plan
Every business should have a marketing plan that consistently drives attention and interest. It may include blog posts, videos, and social media content. When a DIY homeowner needs to complete a project, the consumer may find a blog post or video online.
Hardware stores that consistently market are more likely to find new customers.
Offering Specialty Services
Finally, a store can attract customers by offering additional services that solve problems. That may include equipment rentals to people who need a piece of equipment for a one-time project. Installation services are also popular. If you sell windows, offer a package that includes the window and installation.
Managing your business is time consuming, and you may not have the extra time or the expertise to sell your hardware store. You can reduce your time commitment by finding an experienced business broker.
Why You Should Use A Business Broker
A business broker provides a number of services to sell your business in less time, and for an attractive price.
Uncovering Business Value
Brokers can identify factors that make your business valuable, and include those factors in the marketing materials they create for potential buyers.
Finding Potential Buyers
Nothing is more frustrating than investing your valuable time with a buyer who does not have the resources to purchase your business. Brokers maintain a network of accountants, attorneys, and investors who are involved in business transactions. They can identify serious buyers who have the financial means to purchase your business, saving you time and effort.
Creating A Business Valuation
The broker will review similar hardware store sales, and other industry data to place a value on your business. They understand all of the factors, and can justify the value in a negotiation with a buyer.
Raincatcher's brokers have worked on thousands of business sales over more than 30 years. They can point to a number of successful sales, including the example below.
A Success Story
Neil Harper purchased Alpine Builders Hardware, a decorative hardware firm, in 2010, and decided to use a business broker to sell the business. Neil used a broker to “cast a much bigger net” to find a qualified buyer, and to negotiate the best price possible.
Neil’s financial advisor has other clients who have used Raincatcher, and the advisor referred Neil to the firm.
Neil was impressed with Raincatcher’s national marketing approach, and the ability to develop the sale price and negotiate with the buyer. Raincatcher kept the process moving forward until the sale was closed, and Neil’s broker provided frequent updates.
Due to Raincatcher’s efforts, Neil was able to focus on managing the business during the sale process. Ask the experts at Raincatcher to work as your trusted advisor today, and sell your business with confidence.