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Profitable Online Store Vs Non-profitable Brick and Mortar Store / Best way to sell the business as a whole?

I have been building my online store clientele for about 5 years now and it has been profitable since the beginning. About 2 years ago I opened my brick and mortar store, however with the high overhead costs of maintaining a physical location the store itself has not been profitable. Looking for advice on the best way to approach the idea of selling my business as a whole and not just the online part of it.

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We are financial consultants to a group of investors whom we have their consent to manage their funds which is in our custody for cooperation in joint venture business investments.

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Aug 17, 2017
Gino DiGiallonardo
RI Business Advisors
Worcester County, MA

Pamela,

I can help you sell the online portion of your business without the retail. PM me for more details or visit our website at www.ibizbrokers.com. Thanks

Feb 20, 2016
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The BAF Group LLC
MD

Pamela, the way you have phrased this question makes it a little bit difficult. Most small businesses are priced and sold as a function of positive Cash Flow or Profit. If you have a successful online store, but are losing money on the brick-and-mortar segment, the question is: Why would anyone want to purchase the losing arm of your business? I did some consulting a number of years ago for a company that was in almost exactly the same situation. The owners came to me wanting to sell their business, but needed to position the business first, for maximum pricing. They also had two arms, but all of their Revenue and Expenses were so intermingled, that they did not understand the issues in the way you do. When I separated the Income and Expense of the two arms of their business, it became clear to them, and I convinced them to get rid of the brick-and-mortar portion of their business. The profitability skyrocketed, and their workload actually diminished. They then had the ability to sell at a much higher price than they would if they had retained the physical store, but things were so much more beneficial at that point, that they decided not to sell, at all!

So unless you have reasons to believe that your brick-and-mortar store needs something that you personally cannot provide, but with a new Buyer, it can be quickly turned around, I would seriously look at dumping it, before trying to sell the business. Unless you can turn it around yourself, do not expect a buyer to come in and pay you top dollar for an aspect of the business that you have admitted is not profitable, and which will require the Buyer to make a further investment, in making that part of the business viable.

Feb 8, 2016

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