Pawnshop Valuations

Pawnshop Valuations and the Importance thereof

Pawn Family and Friends,

Today’s Blog is an important one and has to do with Valuations.

Many of you may know that Pawnshop Consulting Group and Jerry Whitehead specifically have been involved in the mergers & acquisitions side of the Pawn Industry for several decades.

To date, through my various management and operational roles along with the consulting roles, I have been involved in the activity of buying, selling, and representing more than 250+ store transactions for deals totaling well over 100 million dollars throughout my career in the Pawn Industry.

In the past 20 years or so, Pawnshop Consulting Group specifically has been involved in providing hundreds of valuation opinions for our growing global client base.

Valuations are an important aspect of knowing you business in complete detail. We have found many in our industry lack the full scale understanding of their key performance indicators, the metrics in general, and may not have any idea what the value proposition of the business is either.

Valuations have become increasingly important for a host of reasons:

• Determining fair market value of the business in general
• Establishing fair market value for conventional financing and enhanced banking relationships
• Establishing guidelines for management or ownership disposition changes
• Partnership dissolutions
• Estate planning
• Retirement planning
• Divorce proceedings
• Properly evaluating the businesses for family inheritance, or succession plans

The above are the most reasons that many of our clients have sought out our services as it comes to properly evaluating pawnshops in general. Pawnshop Consulting Group remains an industry leader in this field and has for a very long while.

• Determining fair market value of the business in general

Determining fair market value of the business in general is great knowledge to have for any operator in our opinion, as it sets the mindset for the owners and operators as to what the true value of their hard work and labor looks like in today’s world. We often find this sets up enhanced motivation for continuing to enhance the overall performance and well being of the operations in pursuit of overall performance enhancement.

• Establishing fair market value for conventional financing and enhanced banking relationships

In times of recent, Pawnshop Consulting Group has been providing more evaluation services for our growing client base to enhance the relationships many of our clients may have with their primary banks, bankers, or lending institutions. When financial institutions understand the FMV or fair market values of what these businesses are worth, in many instances we see lending in general, and or lines of credit are more often enhanced for our clients that have good financials, good financial understanding of their business, and more importantly solid up to date information on what those businesses are worth in today’s environment.

• Establishing guidelines for management or ownership disposition changes

From my personal experience and as a consultant, increasingly we have seen many groups and operators out there creating or desiring to allow for management and or ownership changes within their operations. Having solid evaluations conducted can enhance the overall value perceptions of the business and to help insure everyone receives a fair hand in what the value expectations are of the business in general. Clear understanding of expectation for any potential negotiations.

• Partnership dissolutions

Partnership dissolutions have been on the rise in times of recent, and again, having solid business evaluations in place help minimize either the lack of understanding, or expectation that may exists between any partners involved together in any business. Relationships can change overtime and this can lead to dissolutions in come cases.

• Estate planning

Being a victim of violence personally, and having had to fight through a very difficult estate with some family members in my own life many years ago was a big eye opener. Having solid family estate planning is essential in attempting to preserve the assets and equity of whatever assets may have been accumulated during any particular family or family members life cycle. The tax consequences can be severe to paralyzing if proper planning is not put in place well in advance of any unforeseen events that could, or would happen. Protect your assets and or the lifelong work of your efforts with solid estate planning, this is some of the most important advice I could ever offer as a consultant and somewhat of a victim of incomplete planning by a family member many years ago.

• Properly evaluating the businesses for family inheritance, or succession plans

AS a continuum of solid estate planning, determining fair market value of businesses for family inheritance or succession plans is just good business sense. We have witnessed numerous clients over the years that had family members or others that became to ill to work or in some cases passed away quickly. It is at times like that these that having the evaluation process of the business together well ahead of time makes any potential transition smoother for all remaining family members and or survivors.

• Retirement planning

Increasingly we have been witnessing more of our clients are very focused on their retirement planning. What options do they have, how much will it cost for me to retire and live on and more. At Pawnshop Consulting Group and PawnTrain, increasingly we are helping more and more operators set up their operations on auto-pilot with good management teams and systems in place that can allow our owner and operators to experience a better quality of life starting today. Understanding the performance, retirements expectations, and the value of the business is very important when exploring the retirement options going forward, and PCG and PT are here to help.

• Divorce proceedings

Unfortunately, there are times when family-owned business are plagued with separation and or divorce. Once again, having a clear understanding of what the business is worth well ahead of time may assist in defining on what the correct actions could be when faced with this life changing dilemma. Again, Pawnshop Consulting Group is here to assist.

Conclusion

Having an up-to-date evaluation of your business can be good for many reasons including the ones’ listed above. Please do not hesitate to reach out to PCG for any additional information on any and all of the above if we may be of service, we are here to help!

Respectfully

Jerry Whitehead
Pawnshop Consulting Group, LLC.
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