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What are my options if I cannot sell my business?

Guest post by: Andrew Rogerson

Article Overview: If you experience difficulty selling your business, there are options available to you. It is important to take care of your lease if applicable, assess your assets and see what you can do to get the best price for your business and work on your inventory. This article goes over these steps and more to help you when you find you cannot sell your business.

What are my options if I cannot sell my business?

This current recession in 2008 and 2009 is marked by how low the economy has gone, the increase in unemployment, but most frustrating of all, how long it has taken before the “green shoots” appear. If your business is struggling and you think your only option is to close the door and hand the keys back to the landlord, here are some things to consider.

First, it’s rarely as simple as closing the door and handing the key back to the landlord. If your business has a lease you obviously need to discuss the situation with the landlord. If you have a good relationship and feel you can handle it on your own to save hiring help, take care as you handle the issue. Bear in mind the landlord is no different to you. They lease the real estate to make money. If you close the doors, they need to find a replacement for you which may take time to achieve. This can be a talking point with the landlord as you may be able to bring a tenant to replace you. If this is the case, make sure this is correct as the landlord may become frustrated if the person changes their mind. Similarly, the landlord is not required to accept the person you bring so be aware the landlord has options.

Second, and this is the main reason for this article, some businesses are cash poor and so are struggling to keep their doors open. That is, they are unable to generate enough sales to produce the profit that allows them to keep their doors open. However, some of these businesses are rich in assets. If this is the case, a real option is to manage down the assets to either keep the business going or get the best price possible for the assets. Here are some suggested strategies.

If the business has a lot of excess inventory but limited cash, move the excess inventory. This means going through each piece of inventory to make sure it’s in good condition. If its condition is questionable, discount it but get it sold. Better to have a few dollars in the business and free up some space than have it sit around and collect dust. This is especially true if the business is paying to store any inventory as costs can be reduced by eliminating unnecessary storage space.

Most buyers are interested in two things when buying a business; cash flow to service debt and provide an income to sustain the buyer’s lifestyle and potential. Buyers are not excited about buying a business and managing it down to a smaller business. If you own a business that is challenged by cash flow and limited potential, your buyer may be someone in the industry who is looking to add the assets of your business to their business and therefore take you out as a competitor. These buyers can be harder to find and they are almost always only motivated by paying as low a price as possible.

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Article Tags: Andrew Rogerson, business, Business broker Sacramento, business escrow, business finance, business for sale, business plan, Buy a business, due diligence, exit plan, Murphy Business and Financial Sacramento, Sacramento business broker, Sacramento business ownership, SBA loan, sell a business, Sell a business, Seller finance, succession planning



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Re: Buy An Established Affiliate Marketing Website - If anyone wants to sell their website it is good to know that there are so many different options available, so it is a matter of finding a value for your site and then settling on which method to use to sell it. MichelleJ
Re: Want to Sell Your Website? - Thanks David Not looking to sell my site, but one never knows what may happen in the future and it is always good to have options in case the time ever comes that I would like to sell and move on maybe to a different niche or something. Have bookmarked the link for reference. MichelleJ
Selling my business.... - I am looking to sell my business. It is a profitable business but I want to get out because I am burnt out after 7 years(since I was 17)......... I am almost ready to sell(making the proper preparations)..But I'm unsure about my lease with the landlord. He doesnt seem to want to resign.. I am worried about how marketable my business is with only 2.5 years on the lease... When I sell my business, does my landlord have to resign with whoever my buyer is? Thanks in advance... G.
Re: Help for Inventors - I think you're right Michelle. We need several options when it comes to something so important. Many people will sink their life savings into their inventions and they don't want to trust someone just because of something one person says about them. They should thoroughly check things like this out and you are just giving them more options. Kudos!
Re: Banks Vs. Credit Unions - [quote="Nana":103oec26][quote="Takuya":103oec26] Credit Unions (they hate to be called banks) are more conservative. Although they typically offer the best terms, they are more concerned about people's abilities to repay the loan. [/quote:103oec26] So it would be best to visit a credit union to try an obtain a loan before going to a bank? Or are credit unions looking for people who have a more matured business since they'll have a greater chance of paying off the loan?[/quote:103oec26] Its also very possible that one bank could provide the best checking and savings options while another bank could offer you the best lending options. Nothing says you can't deal with more than one bank or credit union. I've done this a number of times with different businesses and I've gotten the best options for me and the business and it also provides additional credit references. Shri


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