A business is sold for various reasons, and not always sad ones. It is not difficult to do if you are consistent. It isn’t easy to cope without a lawyer and a broker, but it is quite possible. At least part of the process can be controlled independently. A ready-made business is also a product, so it needs to be prepared, evaluated, and interested buyers for sale.
Preparation for sale
Even if you know how farms for growing and processing Marijuana are arranged and you have established production, there are moments when you have to part with the business. To do this, an individual entrepreneur or company needs to tune in to sell their business, deal with business processes, take an inventory and prepare a financial report. The main thing is to be determined to sell. No matter how strange it may sound, but first of all, you need to make the final decision to sell your cannabis license and then not doubt it – doubts can affect its behavior and lead to the failure of the deal. That’s why you will need some help from a cannabis consulting company to guide you through the procedures.
Take inventory.
All property must be counted, recorded, appraised. It is essential to write down the name, model, brand, year of purchase, and price for tangible assets. It is equally important to list intangible assets: a trademark, pages in social networks, a promoted website, copyright, good reputation.
Prepare financial statements.
It would be best to create a financial reporting table with a breakdown by income, expense, and profit. Specify cannabis financing separately. If not all cash flows officially pass through the company, this will complicate the situation. Due to unreasonable figures in the reports, the business’s price will have to be reduced. All movements need to be supported by documents, so take care of them in advance.
Rate your business
A business is assessed based on its payback: it is necessary to calculate how many months of work the business will take back the amount invested in its purchase. If the property does not have real estate and expensive industrial equipment, it is worth focusing on the accepted average payback of the marijuana business. On average, about 10–20 months. It is not much, but the risks are also high. Nobody is ready to invest the money that he will get back in five years.
Also, it would help if you calculated how much it costs to build a similar business from scratch – not only to buy equipment and make repairs to the premises but also to bring the business to the current level of revenue. To do this, you need to make an inventory of all tangible and intangible assets, evaluate each of them.
Find a specific buyer
You can sell this kind of business on your own or with the help of brokers.
The advantage will be to receive 100% of the money in self-sale instead of 90% – it is the ten percent commission that intermediaries usually take. The obvious risk: if an entrepreneur has no experience in large transactions, he will not succeed – either he will sell well below the market, or he will set a price that no one will agree to. There are some simple guidelines to help you sell your business on your own.
- Post ads wherever you can to sell quickly. Do not limit yourself to standard sites for selling a business. Tell about the sale on thematic sites, thematic groups of social networks, business chats, etc. Be prepared to handle a large stream of incoming requests.
- Remember the significant numbers and metrics. When you first communicate with a potential buyer, you need to answer all questions. Get ready and write down the main numbers.
- Find out for what purpose the client wants to purchase your ready-made business – for profitable investment of money or because he wants to work in this area.
If investing, remember that investors can compare the same objects and different businesses with the same profitability. So, buyers want the marijuana business strictly, and they evaluate only these offers on the market, gradually narrowing the circle.
There are investors for whom it is not essential what to invest in and which company to buy. The main thing is the return on business. Those who want to make a good investment are primarily interested in partial process automation, quick payback, ready-made documents, and reporting. And suppose a client wants to immerse himself in your business and develop it. In that case, an important point will be the availability of detailed instructions on business processes, a company development plan, and a positive business reputation.
