Are you trying to sell a business that is losing money? You may be wondering if it is possible, and the answer is yes. Despite the fact that selling an unprofitable business may be more difficult than selling one that is profitable, it is entirely possible to find a buyer for a failing business. In this article, we will explain the steps you can take to successfully sell a business that is losing money.

Can You Sell a Failing Business?

The answer is yes, you can sell a failing business if you are willing to put in the effort. However, the process of selling a business that is losing money will differ from selling one that is profitable. Potential buyers will need to have a deeper understanding of the business and its potential. Additionally, it is recommended that most business owners first focus their efforts (if possible) on making their business profitable before they try to sell it.

Estimate Its Value

The value of a business can be measured in ways other than its profitability. Even after performing a financial recasting, some businesses may still be showing a loss – or be barely profitable. It is easy to believe that such a company is worthless, but this is not necessarily the case. Business owners can look at the value of their assets, such as equipment and inventory, and the potential of their customer base. Additionally, the value of the brand, the experience of the staff, and the reputation of the business can all add to its value.

Negotiate From Strength

One of the critical mistakes that business owners make when selling a failing business is not negotiating from a position of strength. A business owner should be prepared to negotiate and make concessions in order to get the best deal possible. Business owners should also be prepared to prove the potential of their business and demonstrate the value of their assets. Additionally, they should be prepared to discuss the liabilities and risks of the business and explain how they can be managed.

Split Assets and Sell Separately

If you are having difficulties selling a failing business as a whole, another option is to split your assets and sell them on separately. This can include any equipment, inventory, or other assets that you have. This will enable you to get the best price for each individual asset and can help to make the sale of the business more attractive to potential buyers. Additionally, splitting assets can help to reduce the risk and make it easier for the buyer to finance the purchase.

Selling a failing business is possible, but it is important for business owners to understand the process and know how to negotiate from a position of strength. Estimating the value of the business and splitting assets and selling them separately can be beneficial in helping to make the sale more attractive to potential buyers. At Atlantabusinesses.com, you can find answers to all your questions about selling a business and about business brokers.

What is the worth of a business that is not doing well?

You could also assess the worth of an unprofitable enterprise by examining its balance sheet, though you may need to apply a discount due to its lack of profitability. Estimating its liquidation value, which entails the duration, effort, and cost of liquidation, can give you an idea of its value.

Is it possible to dispose of a business that is not making a profit?

When a business is not making money, some people opt to put it on the market. Nevertheless, this can make it more difficult to find a buyer. Thus, it is important to consider the sellability of the company, its preparedness to be sold, and the timing of when to do it. To make the business more appealing to prospective buyers, one should focus on increasing profits.

What is the best way to get rid of a small business that is not making a profit?

4
Enlist the help of a business broker to help you find potential buyers and
negotiate a sale.

1
Investigate what similar businesses in the area have fetched in the past.
2
Emphasize the advantages of the company to prospective purchasers.
3
Clear any outstanding business taxes and charges that are due prior to the sale.
4
Engage the services of an experienced business broker to seek out purchasers and work out the sale.

What benefits would someone see in purchasing a business that is not doing well?

An advantage of purchasing a business that is experiencing difficulty financially, instead of solely acquiring its assets, is that the losses can be used to offset potential future earnings.