If you’re struggling to sell an unprofitable or failing business, don’t despair – there are buyers out there who can take your business and turn it into a profitable venture. Below, we will review some tips and ideas on how to sell your failing business and get the best value for it. Just because a business isn’t making money, doesn’t mean it doesn’t have value. To the right buyer, even a money-losing business can be diamond in the rough and worth good money.
1. Get your financials in order
Make sure your financials are in order. Before you put your business on the market, make sure all of your financials are up to date and in order. This will give potential buyers confidence that they’re getting a true picture of the business’s finances. They may not look great but a clear picture is important.
Don’t hide any problems. Be upfront about any challenges or problems that the business is facing. Buyers will be more likely to trust you and feel confident about their purchase if they know all of the facts upfront.
2. Prepare a detailed sales memorandum
This document should include a full description of your business, its financials, and the reasons for its current state. It’s important to be honest about the challenges facing the business, as this will help you find the right buyer and get the best price.
3. Find the right buyer
There are two types of buyers that may be interested in your failing or struggling business: those who are looking to purchase and flip an existing company, and those who are interested in buying the assets of a failing business. The latter group may include competitors looking to expand their market share, or businesses that can absorb your clients and employees.
Finding the right buyer is key. Competitors can be a great avenue for this because they can absorb your clients and continue to provide top-level service. They are also very well versed in your industry and able to understand how to turn the acquisition into a profitable venture.
If you’re struggling to find a buyer. You can attempt to hire an experienced business broker. A business broker can help you identify prospective buyers, facilitate the sale process, and negotiate the best possible price for your business.
There are also other private investors or private equity companies like XIT Acquisitions that are interested in buying failing businesses. Here at XIT, we’re always looking for opportunities to buy businesses where we can bring additional capital, skills, and experience to help turn them around and help them reach their full potential. We’re also looking for businesses that will complement other businesses already in our portfolio. If you’re interested in learning more about our process and what we would offer for your unprofitable or failing business don’t hesitate to reach out.
4. Negotiate a fair price
When selling a struggling business, it’s important to remember that buyers are looking for a bargain. Be prepared to negotiate on price, and be realistic about what your business is worth.
5. Close the deal
Once you’ve found a buyer and negotiated a price, it’s time to close the deal. This process can be complex, so it’s important to have a lawyer or business broker on hand to help with the paperwork and ensure that everything is done properly.
How to sell an unprofitable, failing business that is losing money.
Selling a struggling or failing business can be a difficult process, but it’s not impossible. With some planning and preparation, you can find the right buyer and get the best price for your business.
If you currently own and/or operate a failing business and you’re looking for an exit strategy please reach out to our team here at XIT Acquisitions before closing your doors. We are currently in the market for good businesses that are struggling that we can help transform into great businesses that are thriving.
