Selling your retail business is a complex and time-consuming process that requires putting a course of action in place to help you attract the best opportunities. Our roadmap will help you determine the value of your business, hire the right help, develop an exit plan, market your retail business to buyers, and help you navigate negotiation to help close the deal successfully.
The first step you need to take to prepare your retail business for sale is to understand its value. There are several methods for valuing a business, but many business owners and potential buyers apply pricing multiples to assess the market value range. Using this market-based approach will help you remain objective, which is vital when valuing a business for sale—allowing you to establish a realistic and competitive asking price.
Market-based valuations compare retail businesses to each other and hinge on valuation multiples. Multiples are derived from the reported sales price, cash flow, and revenue of previously sold businesses. They allow prospective buyers to compare the values of previously sold businesses to new business sale listings with varying levels of sales and earnings.
|
Retail Businesses Sold (2017-2025) |
Average Earnings Multiple |
Average Revenue Multiple |
|
All Retail Businesses |
2.72 |
0.58 |
|
Bike Shops |
2.53 |
0.42 |
|
Clothing and Accessory Stores |
2.22 |
0.51 |
|
Convenience Stores |
2.82 |
0.41 |
|
Dollar Stores |
1.25 |
0.20 |
|
Flower Shops |
2.05 |
0.48 |
|
Furniture and Furnishings Stores |
2.96 |
0.66 |
|
Grocery Stores and Supermarkets |
3.38 |
0.43 |
|
Health Food and Nutrition Businesses |
3.08 |
0.73 |
|
Jewelry Stores |
1.86 |
0.62 |
|
Liquor Stores |
3.41 |
0.52 |
|
Nursery and Garden Centers |
4.15 |
0.84 |
|
Pharmacies |
2.95 |
0.45 |
|
Smoke Shops |
2.14 |
0.49 |
|
Vending Machine Businesses |
2.24 |
1.18 |
|
Other Retail Businesses |
2.80 |
0.60 |
While retail business valuations typically fall into an average range, each business valuation varies depending on the local market, specific financials, and operations of each business. For potential sellers who are putting together an exit strategy, it's a good idea to look at general market averages to get a starting range.
For retail business in general, the average cash flow multiple is 2.72, and nearly 70% of retail business falls into a range of 1–3. This wide range indicates how the specific local market trends and unique business operations can affect the valuation and sales price.
Retail business owners look to sell their businesses for between 35 and 50 percent of gross annual revenue. Inventory costs for retail businesses are handled in a variety of ways and depends on the type of retail business being sold. The negotiated sales price is often separated from inventory cost. Potential buyers will look to negotiate the value of the inventory offered as part of the sale.
For example, if a retail business is making approximately 500,000 in sales a year, the sale price of the business would range from $175,000 to $250,000.
In order to determine an asking price for your retail business, you'll need to gather the financial documents for this year, and the past two to three years. You'll want to have Income/Profit & Loss and cash flow statements, as well as a balance sheet showing the value of the tangible assets minus the liabilities your retail business owes. An accountant can help you put together an SDE, showing how much your business makes after adding back non-recurring and discretionary expenses.
As the business owner, you know the strengths and weaknesses of your retail business best. However, you'll want to enlist the right experts to maximize the value you receive for the business you've built.
As you gather the financial documents required to value your business, it would be helpful to have an accountant to help organize all your records and help you create all financial statements. You'll need records going back three years, and prospective buyers will scrutinize your financials during the due diligence phase. Having a trusted accountant as part of your team is essential.
Enlisting an attorney experienced in business acquisitions will help protect your interests throughout the selling process. From non-disclosure agreements to letters of intent and offers to purchase, an attorney will help you navigate the legal implications each step of the way. Your attorney will also help you through negotiations and draft the buy-sell agreements.
For businesses with over $1 million in revenue, you might hire a business appraiser. Appraiser's asses the value of your retail business if you need a well-documented analysis or if your business has not operated long enough to have a reasonable earnings history. For businesses with earnings under $1 million, you may be able to save an appraisal fee by conducting your own appraisal, along with a business broker and your accountant.
Business brokers are well suited to navigate the business sale process and are valuable members of the team. They act as intermediaries to facilitate the process of selling your retail business from start to finish. Providing market valuation, pricing analysis, and strategic guidance throughout the process, brokers impart essential advice for maximizing value. Enlisting a broker with specialized knowledge about your industry is especially important. In general, brokers work on a commission, receiving 10%-15% of the final sale price. This contingency fee arrangement ensures that your interests are aligned with your broker's.
Whether you're selling your retail business to a trusted business partner, passing down to a family member, or listing on the open market, you'll want to establish an exit strategy. Ideally, you'll want to start planning your exit three years before you list your retail business for sale. This timeframe allows you to understand the value of your business, shore up expenses, get your books in order, and put a management team in place. These steps help solidify the earning potential of the business for potential buyers.
The time it takes to sell a retail business varies and depends on many factors. Prepare for the sale to take anywhere from six months to a year. For retail business sales, the average days on the market in 2025 were 155 days. To ensure a swift sale, price the business realistically and make sure your financial documents are clear and understandable to potential buyers.
There were 1027 retail business sales on BizBuySell in 2025. When considering the factors that have the most impact on how long it takes to sell a business, consider the sale price, cash flow, rent /lease considerations, and location.
After establishing the value of your business and developing an exit plan, it's time to prepare the business for sale. You'll want to gather all necessary information and paperwork and identify team members that can take over the day-to-day management of the operation. If team members need additional training, this is the time to do it. You'll also want to create manuals that document processes and procedures to ensure a successful transition.
As you plan your exit, think about the factors that will make your retail business attractive to potential buyers. Take the time to look at your business as a prospective buyer might. Now's the time to implement any improvements to the business.
|
Improves Price Multiple |
Reduces Price Multiple |
|
Reliable and well-documented operation: organized financials, detailed operating procedures, comprehensive vendor policies, etc. |
Obscure operation: Complicated or non-existent bookkeeping, unreliable vendor relationships, undocumented agreements, etc. |
|
Good location near anchor retailers and/or other foot traffic draws. |
Low traffic location requiring constant marketing to draw customers. |
|
Market or lower rent and good lease terms. |
Above market rent and/or undesirable lease terms that will need to be renegotiated. |
|
Optimized current inventory with a high turnover rate. |
Stale or old inventory with low turnover rate. |
|
High customer retention rate: Retail businesses that have a long list of repeat customers are more valuable. |
Low customer retention rate: Retailers that depend on constantly acquiring new customers are less desirable. |
|
Experienced and tenured employees likely to stay after the sale. |
Employees that are not committed to staying once the business is sold. |
|
Operations management in place. Ideally owner focuses on high-level strategy, not daily operations. |
Owner manages daily operations – owners too connected to the day-to-day operations impact value. |
|
High AOV – A healthy and high average order. |
Low AOV – A low average order value means your transaction revenue is lower than industry norms. |
|
High Conversion Rate – The ratio of sales to foot traffic adds value to your business. |
Low conversion rate requires more marketing and sales efforts. |
|
Seller financing: Retail owners willing to finance a portion of the sale can often receive higher prices. |
Cash only: Sellers who insist on all cash will usually have to accept a lower offer and may receive fewer offers to consider. |
Many of the business qualities buyers look for are out of your control. Focus on those you can affect, and make yours stand out from other retail businesses looking for new owners.
Finding the right buyer for your retail business starts with a targeted and efficient marketing campaign. Retail business owners first need to establish if the sale will be held confidentially. For businesses listed for sale, it's standard practice to use discretion to help keep the business operating as smoothly as possible. The major benefit is that it helps maintain value, not to mention prospective buyers prefer sensitive information kept confidential. Of course, there are exceptions. For example, if your business is well known and respected, widespread knowledge that it's for sale is potentially beneficial.
When it comes to marketing approaches you can take when listing your retail business for sale, a combination of tactics works best. You may want to reach out to business associates, your lawyer or accountant, and even trusted competitors to let them know you're planning to sell. For the widest audience, you will want to list your sale on an appropriate online marketplace like BizBuySell.
If you choose to enlist a business broker, they will handle the marketing strategy, but make sure you stay informed on progress. Some brokers may prepare regular reports on number of inquiries, signed NDAs, and serious prospects. If they don't, ask for regular updates with specific numbers.
The final steps when selling a retail business come down to negotiating the terms and closing the deal. It's important to remember that keeping your emotions in check, whether you're selling your business on your own or using a broker, is key. If you decide to go the For Sale By Owner route, lean on your accountant and attorney to give you an objective point of view during the negotiations.
Financing options are increasingly important in today's market to close the deal. Consider financing a portion of the business sale over time with interest or having the business pre-qualified for an SBA loan, which can maximize your negotiating position and help you get a better sales price.
Once final terms of the deal have been agreed upon, it's time to close the deal. Ideally, scheduling the closing at the end of the quarter, month, or pay period simplifies the monthly expenses that transfer with the sale. For an easy transition, consult our checklist of things you'll need to do to close and transfer the retail business to a new owner.
Selling your retail business is a complex process, but you can simplify things by taking the time to understand the value of your business. Whether you list and market the business on your own, or hire a business broker, you'll be on your way to a smooth transaction and close the sale quickly.
Get our free Guide to Selling your Small Business for a step-by-step guide that will walk you through valuing and selling your retail business.
