Article Summary of 6 Helpful Tips To Sell A Business Fast:
- Reasons Why You Would Want To Sell A Business Fast
- 6 Ways To Sell Your Business Quickly
- Why You May Want To Sell To A Business Investor
6 Helpful Tips To Sell A Business Fast
Many business owners are skeptical of the idea of being able to sell a business fast. The belief is that if it is a big purchase item, then it must take a long time to buy and sell it.
The most reasonable comparison would be real estate. In most people’s experience with buying or selling a house, it can take 3- 9 months. That’s because there’s the time to search, the due diligence, the qualifying for a loan, etc…
In reality, if you’re an experienced real estate investor who doesn’t use conventional strategies, you can buy and sell houses in as little as 72 hours.
The same rationale exists with mergers and acquisitions, which is why you are able to sell a business fast.
Why Would You Want To Sell A Business Fast?
Here are the 3 main reasons business owners sell a business fast.
#1. Cash for medical expenses, college tuition, or a down-payment on that winter home in Florida.
#2. The business is floundering and won’t last much longer.
#3. The business owner is ready to get on with what’s next, be it retirement or a new business idea.
Reason #2 is especially painful. Many business owners tell me privately how their business is in dire straights. They’re worried about their family, mortgage, kids’ futures, and their employees. The weight of the world is crushing them. They need to sell fast.
When it comes to selling a business, it is never quick or easy. However, some ways of selling are faster than others.
6 Ways To Sell Your Business Quickly
Below are six helpful tips for selling your business quickly:
1. Price your business at or below market value
This is straightforward and the least ideal solution, but it will allow you to sell your business faster.
If you can’t find or secure a buyer at a certain price point, lower the price. This might entice a buyer to move forward with a purchase, or enable a buyer who was previously unable to consider a purchase to buy.
While no business owner will readily agree to lower the price, the economics of the market and demands of a difficult situation might require a cheaper sale.
2. Sell the assets or inventory instead of the entire business
There is a distinction when selling a business that many owners don’t make up front: Should I sell the business as an entity or just sell the assets?
In a failing business, the business itself may not offer much value anymore. However, company assets, such as physical equipment, facilities, customers, patents, or trademarks will still carry value. Business investors or competitors are often eager to purchase assets.
Unfortunately, after the sale of the assets, you’ll still be stuck with the business. Make sure to prepare for any legal obligations.
3. Help the buyer get financing
Sometimes a business owner is able to attract buyers who are qualified to purchase, but for whatever reason, lack access to sufficient financial capital for the purchase. If you’ve found a buyer you believe can maintain your legacy, you can help them secure additional financing. Here’s how:
- Help the buyer find a partner to raise additional funds.
- Lease the business, including an option to buy.
- Have the buyer create an Employee Stock Ownership Plan to raise funds, provided the business has enough employees
4. Sell to a trusted employee or manager
You won’t need to search for a buyer if your employees are interested. You know them and they know you. This allows you to jump ahead of the buyer search process.
Of course, there are many downsides to be aware of here. Employees, even groups of employees, don’t often have access to sufficient capital to make the purchase. Also, good employees don’t necessarily make good owners.
5. Hire a business broker who can find a qualified buyer for you
I’ve written at length about business brokers on my blog. There are many pros and cons. The right broker at the right price can make a good deal. This doesn’t happen often, so make sure to really evaluate your potential broker and the benefits they may or may not provide.
6. Sell to a business investor
If you have an unconventional reason for needing to sell a business fast, then you’ll need an unconventional solution to your problem. Business investors excel in this area. Now, I am a business investor, but I am also a business owner and have sold many businesses in my career. Here are the three reasons this works out the best for everyone involved.
- Investors are professionals in buying businesses. They understand the process and the needs of the owner.
- Investors will maintain and grow your legacy. They want to buy, turn the business around, and make a profit.
- Investors have access to the necessary financing. You won’t have to wait while they hunt for capital.
Why You May Want To Sell To A Business Investor
If you need to sell your business fast, then using traditional methods won’t work.
In real estate, if you have a beautiful house in great condition and you have a good deal of equity, then using a Realtor to sell your house in a traditional conventional manner makes perfect sense. But what if you’re not in that situation?
What if you have a house that is in poor condition or are behind on payments or owe more than it’s worth? If you’re not willing to invest in repairs or pay any deficiencies then you can’t sell the house in a traditional manner. In this situation, using a real estate investor would make sense.
If you’re in need of a quick sale of your business, using a business investor may make the most sense.