Business Valuation Blog | Understanding Buying / Selling a Company

What's Considered When Appraising a Pet Products Store Chain?

Posted by Business Valuation Specialists LLC on May 11, 2020 8:00:00 AM

Happy couple taking their beautiful dog to the vet

When you work with pet products in a chain store as your business, you're probably focused on market trends, issues with suppliers and ensuring top-quality products for your customers. But have you thought about what's involved when appraising a pet products store chain? There are several aspects of your business that you may not have considered important that are actually vital to the appraisal process. Here's a quick look at what factors are considered when your pet products store chain is being appraised.


What's Considered When Appraising a Pet Products Store Chain?

  • Finances. What shape are your business' finances in? Are you bringing in plenty of money with a good rate of profitability? Are you struggling to make ends meet in some areas? Have you had good years and bad years? A business valuation specialist will look at all of this information and determine whether journal adjustments need to be made to normalize unusual activity or show a more steady income stream.
  • Market. Is your part of the market expanding or shrinking? If you've specialized in a specific type of animal that are declining or increasing in popularity, that change in the market will be reflected in your business' value. If you provide more generalized products for pets that cover a wider range of species, you may find you're more insulated from market conditions.
  • Income. Do you have steady income or does it fluctuate seasonally? If you specialize in equipment for hunting dogs, for example, you may have peaks just before hunting season to account for. An accredited business valuation specialist will know how to account for changes in income, with several methods to help project income into the future as one means of determining business value.
  • Specialization. Is your business known for innovative advances, such as developing pet products that cater to animals with health conditions? Or are you just one of many businesses that do the same basic thing as everyone else, making it hard to stand out from the crowd? Being a leader with a known brand in the pet community can have a big impact on your company's value.
  • Goodwill. Do you regular provide free products to charitable organizations, such as paying for training for service animals, providing food and toys to animal shelters or helping low-income families keep their pets while going through hard times? Whatever your specific area is, these type of actions build goodwill in your business, increasing your business' market share with intangible assets that must be accounted for.

By having a better grasp of the factors involved when appraising a pet products store chain, you can make better use of the appraisal report you'll receive at the end of the process. This puts you in a better position to make positive change in your business, whether it's ensuring a better sale price when you retire, getting a better deal when you need a business loan to open new locations, work with a tax agency that has incorrectly assessed your business' value and countless other situations. However, the appraisal report can only be used if it stands up to strong scrutiny, something which you're assured of when you work with an accredited business valuation specialist.

Tags: Pet Products Store Chain Business Valuation