How To Sell A Paintball Field
Are you looking to sell a paintball field?
When determining how to sell a paintball field, there are many things that must be taken into consideration, and some brutal truths that must be confronted. There is an emotional connection rooted in the blood, sweat, and even tears that have gone into our creation. This connection makes us want to see our creation continue, and even flourish, after we're no longer involved.
In order to make sure it has the best chance to continue to provide great experiences for years to come, we must learn how to sell a paintball field to business minded people. This doesn't mean we want to seek out corporate minded people, which we associate with wanting to pinch every penny, and raise the rates. It simply means that we need to find people that have enough experience to keep the customers and revenue coming in, and happy people headed out to spread our great message. Some prime options include a business student that enjoys playing paintball at your park, a local business person within your community, or most ideally, someone within the paintball industry that is interested in expansion. Make sure your options are qualified, and can get financing.
Quick pitch here: that last part is where Precision Paintball comes in. We've operated in a challenging demographic environment for years and posted solid growth year over year, and we're looking to expand our reach to new markets. We bring this up because we've been through the acquisition process, and can tell you how we did it, and what we were looking at, from a buyer's perspective. With that said, let's get back to your mission.
Valuation
In order to sell a paintball field to a business minded person, it's going to need to make financial sense. A valuation will typically consist of 3 major components: Profit, Land, and Assets. We'll address each of those here. (Value = (AVG Profit x3)+Land+(Assets-depreciation))
Profit
A typical valuation is a 3 time multiple of the average profits from the last 3 years. This information is found, conveniently, on your Profit & Loss Statement (known as P&Ls). This typically is produced by your accounting software, but it can also be found on your tax returns. In most cases, the potential buyer will request both, have them ready. A bank will not move forward without the last 3 years of tax returns. Tax Returns are less likely to have fake information.
Land
There is a considerable percentage of paintball fields that operate on leased land. This can be a challenge for a buyer, and could make your offering less desirable. On the contrary, a lease may not be an issue if you are in an area where permits are quite difficult to get for a paintball field. Just because some may view leased property as a challenge, doesn't mean you should give up - permits are a fight very few want to take on. Owned land is obviously an asset, but may limit flexibility. The value of the owned land (or of the lease) will be added to the Profit piece of the valuation.
Assets
Tangible - All paintball fields have tangible assets that are expensive to replace. Air systems easily break into the tens of thousands, and infrastructure can add tens of thousands more. When looking at these items, a business minded buyer will have a couple factors in mind: 1) How much is this equipment actually worth (this will come from a balance sheet) AND 2) how much would it cost me to drive a mile down the road and reproduce this.
Another critical asset that can help or hurt the sale is your Rental Fleet. A large, clean fleet that is operating smoothly can be a big boost to the selling points. On the other hand, a lousy fleet with stuttering markers and worn out elastic straps can be a huge takeaway, because the prospective buyer may feel an immediate need to refresh all of the hardware. In our experience, the rental fleet was a HUGE detractor, because it didn't meet our standards.
Intangible - These are the things that are tough to see on a balance sheet, but potentially even more important. These include customer lists, website, social media presence, recurring and scheduled events, and overall position in the community. For customer lists, the more organized they are, the more attractive they are. Your website should be current, and you should have access to both your domain and site design credentials. If the seller needs to completely reinvent the wheel, that could be one more ding in your valuation. On Social Media, a solid presence with regularly occurring posts and an active following is much more desirable than a ghost town with mediocre reviews. Recurring events can be a great boost to your selling position. Being involved and respected with your local community helps as well.
The Precision Story
In our case, the seller wanted many times what we felt the property was worth. To reach an agreement, we had to have some tough conversations. Their business had been showing losses for 6 consecutive years, they were on leased land, and their rental fleet and infrastructure was tired. Through this experience, we developed a solid understanding of what would need to be done in order to sell a paintball field. It needs to be planned in advance and prepared for, much like selling a house. The profits should be in order, or at least on a path upward. The facility should be in good repair, or at least clean. The rental gear should be running well.
The time we feel like we want to sell is not always the time we should sell. In most cases, that extra few months, or even a year, can make all the difference at the negotiating table.
If you're trying to determine how to sell a paintball field, or trying to determine if it's the right time, reach out to us. We'd be happy to at least see if we can help!