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How to Sell Your Fitness Business or Franchise

Starting the process of selling a business can be challenging in many ways. An owner who has put a lot of time and effort into her/his business will not only be looking at the financial benefits which come along with selling a well-established business but also the emotional investment they have in the business. However, it is a proud moment for an owner to sell a business they have established knowing that buyers are willing to put a significant value on their hard work.

Our job at “We Sell Gyms” is to make sure to connect you with potential buyers who value your hard work as much as you do. However, before we do that, it is important to follow a few steps mentioned below to get the best chance of setting a high price for your business.

How long will it take to sell my business?

The quick answer is usually 3 to 6 months if priced correctly and the seller is engaged in the process. The more thorough answer is that this timeline can vary dramatically based on many factors such as the desirability of the location, ability to finance, cash flow, the accuracy of the financial documents, lease factors, quality of build-out and equipment, due diligence of both the seller and buyer, franchisor and/or landlord.

So, how do you speed up the process and prepare for a smooth transfer of ownership? You can greatly reduce the selling cycle timeline by having a Business Valuation or Appraisal completed. (we can offer third-party recommendations for these services (click here to learn more)

But you need to be proactive and engaged in the sales process and be forthcoming with the requested items of due diligence.

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1. Know Your Numbers:

Knowing all aspects of your business financial statements and having a clear understanding of accounting will not only help ensure that you have an idea of the selling price that you will be setting, but it also allows you to show your potential buyers that you are well aware and involved in the business. It also gives them a clear idea of the financial situation of the business as all the information they require to ensure this will already be presented in front of them in the form of clean and well-organized records....

This, however, is not a task that needs to be tackled when you have decided to sell your business. Accounting is the basis of any business running successfully. Whether you do the accounting of your gym yourself or you have hired an accountant, good bookkeeping must be a task that is kept up routinely during the length of the business operation.

The first thing a potential buyer wants to know is the exact situation of the company’s finances, and therefore, we cannot stress the importance of following this first step enough. A well-maintained profit and loss statement gives the buyer a chance to go through all the financials of the business in one go and provide them with an idea of how your company has been performing.

Another essential part of proper bookkeeping is giving the client a look into not only the past financial situation of the company but also the future expectations you had from your business. An economic forecast will allow your buyer to gain an idea about how the business might perform after they take over the ownership from you. Providing this information can be favorable to the seller as it motivates the buyer to make the purchase when they see good profits in the near future.

2. Determine the Value of Your Gym

After you have become familiarized with the financial situation of your gym, it will be much easier for you to determine the actual value of your business and set a selling price, which will be beneficial for you while being fair to the buyer.

Determining the price of your business will include various ...

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3. Consult a Business Attorney

Setting up a meeting with a business attorney is one of the smartest steps to take when thinking of selling your fitness business. Especially for owners who have a considerably small business setup, it is possible that they might not be aware of all the legalities that come with selling a business. Therefore, it is an excellent idea to set a meeting with a small business attorney to ensure that you have all the legal paperwork ready and available to you when you need it.

4. Get Organized

This might sound like a self-explanatory step; however, many owners ignore this step while trying to sell their business as they want the deal to be closed quickly and want the process to be over as fast as possible. Such owners often find themselves amongst a messy situation created because of their lack of attention on the organization of their business and its activities. ...

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5. Find the best buyer

This can be one of the toughest steps in the whole process of selling your business. If word gets out to the members of the gym that the owner is selling, they might cancel the membership and go to a different gym. But if you can’t advertise that you are selling the gym, how do you get the word out and find potential buyers? We at “We Sell Gyms” have made this painstaking process of finding a suitable buyer much easier for the owner. Once the owner is ready with all the ...

6. Dissolve Corporation

The final step to selling your business is making sure you are not listed as the individual legally responsible for any aspect of the business. It is essential to make sure you dissolve all your co-operation or partnerships that involve you in the business legally. If this step is not completed with incredible carefulness, you as the party legally responsible can be held accountable for any future incidents.

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7. Provide On-Going Counseling

Developing a business from the ground up is no small task, and since you have done this task with the business you are about to sell, you will be aware of each aspect of the business’ functions. This information will, however, not be available in any of the record-keeping books as it will be a part of your personal experience. Depending on the experience of the new owners in the fitness market and in running a business, they might...

IN SUMMARY

The selling process for a business you have put effort, time, and money into is anything but easy. However, with the help of “We Sell Gyms,” the process can become much less daunting and can go smoother for both the seller and the buyer.

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