Setting Practical Expectations and Timeline
I get this question a lot and it’s a very difficult, if not impossible, question to answer because there are so many factors that affect the amount of time required to sell a fishing & hunting lodge, camp or resort.
The owner may have debts that need to be paid, or a pending retirement that they want to get to right away, unfortunately the market doesn’t care about this.
Before an approximate amount of time required can be estimated, the following factors need to be considered:
How much money does your lodge, marina or resort make in a year?
Also related to this is how strong is the repeat guest list?
There are a few different markets out there when it comes to fishing & hunting lodges, camps and resorts.
There are viable businesses that provide a good return to owners.
Then there are operations that are more of a hobby or part time business that the owner utilizes to earn only a minimal return but it keeps him or her busy.
I would argue the lodges, camps and resorts that produce minimal income, and generally sell near their asset value, sell faster than the operations with a viable business.
The reason being, is there is obviously a premium to the asking price of a business with a strong income and guest list.
Lodges without a strong business are priced lower, near their asset value which opens them up to a broader market, ex. potential buyers that may be simply looking for a family wilderness getaway compound and a resort with multiple cabins already would be a great option.
If all other factors are “normal” or near the market “average”, it’s reasonable for a lodge, camp or resort priced near its asset value without a viable business to sell in less than a year.
Lodges with a viable business and priced appropriately should expect 1 to 2 years depending on the other factors we are yet to get into.
The additional factors that I will get into below will determine where your lodge, camp or resort’s (if it has a viable, healthy business) time required to sell falls within this 1 to 2 year window.
Where you’re located greatly influences the business’ potential. If you’re located on a desirable lake, mountainous area, proximate to a demand generator, then expect to sell much faster.
Overall economic conditions are very impactful on outdoor tourism businesses.
Fishing & hunting lodges, camps and resort are forms of property/businesses that are very sensitive to economic activity due to the type of lease structure inherent in the business.
Renting at a fishing & hunting lodge, camp or resort can be thought of as a form of short-term lease that can be easily avoided by potential guests should the economy be doing poorly.
Thus, when you’re considering listing your business for sale, you should be aware of the part of the cycle the economy is in. You’re likely already aware of it based on how your business is doing.
If the overall economy is healthy, tourism is often healthy. When tourism is healthy there is much more interested buyers for outdoor tourism businesses. Thus the time required to sell a fishing & hunting lodge, camp or resort is reduced when the overall economy is doing well.
What the Selling Price is
The asking price affects the time required to selling your fishing & hunting lodge, camp or resort in a few different ways.
There’s obviously a large spectrum of prices for lodges, camps and resort businesses. You can buy a fishing & hunting lodge operation for as low as a few hundred thousand dollars all the way up to a few million dollars.
Lodges nearer the lower end of the price spectrum have many more potential buyers thereby speeding up their sale process and vice versa.
Price in terms of being set inordinately high or low from the business’ true market value will also speed up or slow down the price.
Ways to Speed Up the Sale Process
The most aggravating thing for a business owner is to wait for the sales process to be completed after they’ve made the big decision to sell.
Owners tend to have very important reasons for selling their businesses and the longer they must wait, the longer their future plans are tied up.
Following these tips can shorten the sales process:
Consider selling the business to an employee. If the business healthy and has a passionate employee who understands how the place is operated then consider putting it out there to him or her.
Consider Industry Contacts
If you have been in business for a while then you probably know a lot of other lodge, camp & resort owners who would be interested in expanding their operation by purchasing your business.
They also may a couple kids that are interested in one day taking over their business which can create issues.
In one scenario I came across, the owner’s expanded their operation by buying another lodge down the lake and thus were then able to help both their boys enter into the industry with their own lodges rather than picking one successor.
Are you listing your lodge, camp or resort yourself or have you hired a broker?
If you are listing the lodge yourself you’re going to need to do some research on quality places to advertise your business for sale.
We advertise fishing & hunting lodges here, and can get a lot of eyeballs on your listing every month. Potential buyers that are looking specifically for businesses like yours.
If you’re using a broker, have you hired an actual specialist in your industry or have you hired a friend of a friend who normally sells houses and your lodge listing is just mixed in with a bunch of houses on their website?
There are brokers across Canada and the United States, if you want to use a broker, we have a list of recommended service providers here.
I understand the need to be discreet when selling your business but there are many ways to get a lot of potential buyer’s eyeballs on your listing and not have your guests find out so don’t make this your excuse for not really exposing your business to the market.
Aside from simply lowering the asking price to attract more buyers, it may be better to offer seller financing instead.
A lot of buyers, particularly new buyers, may take a lot of time trying to gather enough cash together to purchase the business or to secure traditional financing through a bank.
Once you’ve found a potential buyer, stay in constant contact throughout the sales process and always be available to answer whatever questions they have.
The more information they learn quickly, the faster the sales process will go.
The biggest reason I see for fishing & hunting lodges, camps and resorts taking around 2 years to sell is they’re just asking too much (coupled with the fact you’re looking for a very unique type of buyer).
Fishing & Hunting lodges, camps & resorts are an enormous amount of work and are in a very cyclical industry I generally refer to as outdoor tourism.
Most long term owners of these outdoor tourism businesses have felt the impact of a downturn. For these reasons its understandable that an owner wants top dollar for their business.
Many of these businesses are owner operated as well and the sale proceeds more often than not are going toward retirement.
The problem comes in when owners are deluded by their retirement needs and frivolously set their asking price. They then let their business sit on the market for an extended period because that number is what they need to retire.
If you want top dollar don’t hope to fluke into the right buyer. Don’t even list your business for sale until its realistic that you can achieve the number you want.
How can you be certain the number you want is realistic? I’ll help you set your asking price by providing a thorough analysis and back it with prime, recent market data (comparable transactions).
In short, focus on improving your business and informing yourself before you list in order to shorten the time required to sell.