If you are a small business owner and are looking to sell a business, more specifically an under-performing business, then it may help you to know that there are people out there who buy businesses just like yours in the hopes of turning those businesses around.
Entrepreneurial type investors are constantly on the look out for ‘worst house, best street’ type of businesses. This basically means businesses that are failing, but with potential to turn around, turn a nice profit and sell for an even bigger profit.
Advertising a business for sale in this position is a much better option than preparing for your businesses doomsday!
Reasons Why Your Small Business is Tanking
A business can start to fail for many reasons, including:
- A downturn in the economy;
- Lack of new product;
- Strong competition;
- Population shift away from the business location.
You could be running a successful business for years from the same location, but that business will suffer if the neighborhood goes downhill.
Sell a Business Before Its Too Late?
What are the most common reasons why a business owner comes to the conclusion that they should sell their failing businesses?
Remember that there are always investors out there who will buy your failing business, but they will want to buy at a bargain price. You can choose to enter a buy-sell agreement privately or with a business broker, the result will be the same.
If you don’t think you can turn your business around yourself, then selling before you experience a personal financial disaster may be the best approach.
You Cannot Devote Time To Your Business
When you started your business, you were single and ready to conquer the world. You built your business into a success, but then:
- You fell in love;
- You got married;
- You had kids;
- You realized that your time is no longer your own.
Plenty of successful business owners are married with kids, but your business requires your constant attention to be successful. Lately, you have been relying more and more on part-time managers and other employees to take care of critical tasks.
When you sit down and look at your business books and see your business failing, you have to come to the conclusion that it is time to sell.
Your Location Is No Longer Appealing
For 30 years you have run a successful retail business from the same location and you could see yourself doing that for another 30 years. But as economic conditions in your area deteriorate, the neighborhood your business is in also starts to decline.
The decline of the neighborhood means that your business is now failing. It is time to make a decision.
You cannot afford to pick up your business and move it, but you understand that moving is the only solution. This is the point when many business owners decide to retire and sell their failing businesses to people who can make that move and make your business successful again.
You Just Don’t Have The Drive Anymore
You spend plenty of time at your business, but you know that you simply do not have the desire to run it like you used to. The pressure of making profit and keeping customers happy has worn you down to the point where you simply do not want the responsibility of being an owner anymore.
This can be a unique situation where you can sell your failing business, but still insist on being part of the day to day operations. Many people who have lost the desire to own a business, still have the passion necessary to run it.
Many investors realize that an experienced manager is a great asset and you can work out a deal where you sell your business, but stay employed as the business manager.
This is an arrangement that many investors find very appealing and, when you start the process of selling your business, you will want to make sure to note that your services come packaged with the deal.
It Is Time
Perhaps the one time where you can sell a failing business before things get too bad is when you come to the realization that it is time to step aside.
This can be the most difficult decision a business owner has to make, but it can also help you to avoid significant financial losses and get a higher selling price.
There are a combination of factors at work that help you determine when it is time and most of those factors are listed here already.
The key is to beat the Armageddon by being proactive enough to see your inability to stop your company’s demise and use that to get the most from selling your failing business.
A failing business is nothing to be ashamed of, but it can be a financial disaster if you do not take action quickly. There is a huge contingency of investors available that will buy failed businesses at bargain prices and that gives you a chance to lower your exposure to risk.
When is the best time to sell a business? When recognizing the signs that your business is failing, you can be proactive and before Armageddon sets in.