How Do I Sell a Distressed Business?
As the Great Recession in the US starts to heal and spread through the economy, many business owners
are looking to sell their business and regain control of their lives. For different reasons, the recession has
been longer and deeper than many imagined, one of the main reasons why Chairman Bernanke at the
Federal Reserve keeps saying he will not be raising interest rates for the 'foreseeable future' as he wants
to make sure the growth in the economy is permanent and not temporary as happened during the Great
Despite the return to growth in the economy, a lot of business owners are unable or unwilling to hold on
to their business in the hope of getting a better price if they sold. At the moment there are many buyers
for certain types of businesses but I am seeing these buyers look for bargains. I am also seeing many
business owners saying "Get me out, I am done." They are highly motivated to sell rather than close the
business as they want to see their business survive and feel a new owner with marketing money and
energy can make it thrive and the price they want is extremely reasonable, that is, just the value of the
If you own a business and want to sell because the physical, financial and emotional price is too great
here are some steps to take.
The first step is probably the most important. It's critical to step back from the business to be clear
where it is at. If sales are declining rapidly then that business will be very hard to sell. If sales are flat
then that is good. If sales are starting to increase that's better. To help with this step, look at the cash
flow. If a business has positive cash flow it has so many more options to a business that has no cash flow
and/or no chance of this improving.
The second step is to look at the finance in place. If the business has no loans, that is great as the assets
can be sold free and clear. If the business has loans from family and friends, it is time for heart to heart