How to sell a business that is losing money

When it comes to setting up a business, no owner wants to imagine the day that their business could eventually fail. If you reach this unfortunate stage, accepting that your business is failing is a very difficult thing to do. Perhaps the rapidly changing markets are causing your business to fail, or maybe the competition is too fierce. If you reach a stage where no matter what work and effort you put in, your business is losing money, then you may want to consider selling your business. In this article, we will give you some advice for how to sell a business which is losing money and tips on getting back some of your investment.

Get your business on the market

The process for putting a failing business on the market is essentially the same as if you wanted to advertise a profitable business. There are indeed some useful pieces of advice which will help you through the sales process.

Clear any debts or litigation

If you want to attract buyers, then a useful tip is to clear up any outstanding legal issues which are linked to your business. After clearing up litigation, you should then move on to reducing any debts. Whilst failing businesses can be sold with debts, the more you clear, then the greater vantage point you will have in negotiating a final price.

Identify some selling points to attract potential buyers

If you want to maximise your potential selling price for your business, then identifying factors which will attract buyers is a good place to start. Think about the features that would attract potential buyers if your business was not failing.

Some reasons to consider include the potential to incorporate your business into their current business, the opportunity to acquire assets such as your existing customers, shops location and website, and the chance to restructure your business and turn it around to make a profit.

Be open and honest

If you want to attract buyers, then being open and honest about the current state of your business is crucial. You should raise any challenges your business may face and any obligations which are still to be fulfilled. You need to establish trust with potential buyers to ensure everyone is clear about all of the details. This means that you should disclose details about your revenue and also highlight your losses during the period that your business has been struggling with the most.

Think about separating assets

If you are having issues with selling your failing business as a whole, one option to consider is splitting your assets and selling them on separately. This includes buildings and premises, equipment and technology, customer base, and even knowledge, experience, or ideas.

No matter the case or trajectory of your business, FastCash4Houses is here to help. Get in touch with us today to find out how we can help, whether that is giving you advice, or giving you a valuation of your business.

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