Article Summary of How To Sell A Business That Is Losing Money:
- Is it time to sell your business?
- Being prepared for selling
- Tips for selling a business that is losing money
How To Sell A Business That Is Losing Money
Did you know it’s still possible to sell a business that is losing money? Obviously, it’s not a traditional transaction, but if you’re willing to be creative, you can relieve yourself of this burden and still sell a business that is losing money!
But first, let’s go back to high school…
Pop quiz. Which Greek titan was condemned to hold up the heavens on his back?
Think back to high school English. Greek Mythology. Got it?
If you’re reading this article, you probably feel a lot like Atlas did…. that you have the weight of the whole world on your shoulders.
Maybe the market took a turn for the worst. Or you lost a key client. Doesn’t matter now. Your business is in the red, you’re losing money, you’re struggling to make payroll, and you’re worried about your family mortgage, and your employees.
Atlas was the titan of strength and endurance. As an entrepreneur and business owner, you have those qualities in spades. You’ve built your business and forged an enterprise. Customers, employees, and your partners all look to you to hold up their world. You’ve done it.
Unfortunately, everything has changed.
Now, those instincts that got you to this point are screaming: get out.
You are a modern-day Atlas stuck holding the weight of the world on your back.
I speak with business owners every day who privately tell me they are exhausted, ready to move on because they just can’t hold the weight anymore.
The Weight of the World On Your Shoulders
Owning a business in the red is painful. You’re not alone because almost all successful entrepreneurs get there at some point.
The hardest question you eventually have to ask yourself is: Is it time to sell my business?
Let me tell you a story about a business owner named “John”.
John ran a carpet cleaning business in south Texas. Over the years, he had built that business up into a small chain serving hundreds of clients yearly. John had years of growth and prosperity.
Eventually, like everything in life, John’s situation changed. Competition grew, demand fell, and John was forced to close a few stores. Like Atlas, he put the weight of running the business on his shoulders, taking on more of the day-to-day work to keep the company going. As always, when you do that, the company shrinks and, predictably, slowly slid into the red.
After a few years of negative growth and increasing debts, John had to sit down and admit a painful truth: he needed to sell. John had built a legacy that was providing for his employees and serving a need in the community. John agonized for months before finally deciding to sell.
So what happened to John? He decided to sell his business even though it was losing money That decision to sell turned out to be life-changing. He sold to an experienced investor who preserved his vision. The banks and creditors were willing to work with the new owner, who was able to preserve John’s legacy.
Decided to Sell? Be Prepared for What’s Next
If you are ready to sell a business that is losing money but want to preserve both your business and the legacy you built, then I recommend you sell to an investor. Why? Three reasons.
- #1. An investor will be interested no matter the price.
- #2. An investor has the tools and experience to turn around a failing business.
- #3. An investor understands what you are going through and the legacy you’ve built.
Selling a business that is losing money doesn’t have to be painful if you find the right exit strategy.
Here are 4 tips for selling a business that is losing money:
- Put your business first, even ahead of yourself.
You’ve decided to sell, not to close down. The hardest part is for you to stop holding up the entire world. Ask yourself: What is in the best interests of the business? Take a step back from the center of the stage and imagine where the business will go without you. Better too: ask where you can go without the business weighing you down.
- Find a buyer who can preserve your legacy.
The goal now is to ensure that your legacy lives on and that your employees, customers, and the community can still benefit from your vision. You need to find someone who is interested in your vision and who has the experience and resources to turn things around. Find a qualified and capable buyer.
- Get ready for some serious due diligence.
Any serious buyer is going to want to know just why the business is failing. Get your books in order and prepare for an exam. Competent buyers will dig into everything. Need advice on what to
prepare? Check out my sale preparation article.
- Understand your legal obligations.
As you probably already know, owning a business is a complicated legal matter. You need to be prepared for what a sale will mean, and what your options are post-sale. I recommend you consult your legal advisors if you haven’t already done so.
Summary of Selling A Business – Even When It’s Not Profitable
Selling an unprofitable business isn’t always difficult. The right mindset can position you to both preserve the vision of the company and to create a better future for you and your family. Trust me. Getting out from under an unprofitable business can transform your life.
Questions? You can always contact me for more information. I’m always interested in buying.
Have any questions or comments about How To Sell A Business That Is Losing Money? Please contact me!