What are my options if I am unable to sell my business?
This current recession is marked by how low the economy has sunk, the increase in unemployment, but most frustrating of all, how long it has taken for the “green shoots” to appear. If your business is struggling and you think your only option is to close the door and hand the keys back to the landlord, here are some things to consider.
First Option – Just Close The Doors
It’s rarely as simple as closing the door and handing the key back to the landlord. If your business has a lease, you should discuss the situation with your landlord.
If you have a good relationship and feel you can handle it on your own to save hiring help, take care as you handle the issue. Bear in mind that the landlord is no different from you. They lease the real estate to make money.
If you close the doors, they need to find a replacement for you, which may take time to achieve.
This can be a talking point with the landlord, as you may be able to bring a tenant to replace you. If this is the case, ensure it is correct, as the landlord may become frustrated if the person changes their mind.
Similarly, the landlord is not required to accept the person you bring, so be aware that the landlord has options.
Second Option – Carefully manage the assets of the business
This is the main reason for this article: some businesses are cash-strapped and are struggling to keep their doors open. That is, they are unable to generate enough sales to produce the profit that allows them to remain open.
However, some of these businesses are rich in assets. If this is the case, a viable option is to manage the assets so that either the company can continue operating or obtain the best possible price for the assets. Here are some suggested strategies.
If the business has a lot of excess inventory but limited cash, move the excess inventory. This involves inspecting each piece of inventory to ensure it’s in good condition. If its condition is questionable, discount it, but get it sold. It’s better to have a few dollars in the business and free up some space than to have it sit around and collect dust.
This is especially true if the company is paying to store any inventory, as costs can be reduced by eliminating unnecessary storage space.
It’s about cash flow and debt.
Most buyers are interested in two key factors when purchasing a business: cash flow to service debt and generate an income to sustain the Buyer’s lifestyle and meet their financial objectives. Buyers are not excited about buying a business and managing it down to a smaller company.
Suppose you own a business that is struggling with cash flow and limited growth potential. In that case, your Buyer may be someone in the industry who is looking to acquire the assets of your business and, therefore, take you out as a competitor. These buyers can be harder to find, and they are almost always motivated solely by paying the lowest possible price.
Are you thinking about selling your business? Would you like to know the value of your business? For more information, please visit my website, Business Valuation.
Sell My Business With a Broker
Selling your business is a life-changing event. That’s why it’s essential to plan for this event carefully.
If you’re listing a business for sale in California, you’ll want to find a reliable business brokerage firm. At Rogerson Business Services, a team of experienced professionals works to plan and execute business processes related to buying and selling in California.
You can also consult with Andrew Rogerson on how to increase your overall value.
List of Resources That You Might Find Helpful
- Selling your business
- Get started on a seven-step process of selling my business.
- Get a business valuation
- Get started on a seven-step process of valuing my business.
- Selling your medical practice
- How to sell your manufacturing business
- Selling wholesale distribution business
- Best calculations: How to value a wholesale distribution business
- How to sell a professional services company or firm
- Selling a construction company
- How to sell a trucking company
- EBITDA multiples for a trucking company | best calculations
- How to value a logistics company | find a company worth
Final Take
If you are considering valuing and selling your business or medical practice within the next six to 12 months, please contact Andrew Rogerson, a certified business broker based in Sacramento, California. You can reach him toll-free at (844) 414-9700 or email him at support@rogersonbusinessservices.com. He serves the whole state of California.
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