Selling a Business With Declining Results

Sometimes the decision to sell a business is made for you, not by you. Selling a business when you have to (not want to) can be one of the most stressful experiences that an entrepreneur can go through.

Perhaps there is a family sickness, a personal matter or just plain bad economic conditions (like a recession in Canada) that force a sale under less than ideal circumstances.

Unfortunately, many business owners looking to sell their companies when results are down will need to think extra carefully about the strategy and how to best go about showcasing a declining business in the best possible light, while remaining honest. This article will examine a few things you can do if you really need to sell your business when it is not performing at optimum.

Work with a professional
While this might sound self-serving, working with a business broker is a very good idea if you are selling a business that is in decline. A business brokerage professional can help you identify buyers in the marketplace looking for a business that they feel they can ‘turn around’. Business brokers can also offer you suggestions to make your business more salable.

Is your business really a “going concern”?
If your business is suffering deep losses year after year, you need to determine if it really is a ‘going concern’. In other words, is there a future value to an owner in keeping the business in operation? Talk to your accountant about this. It is very difficult to sell a business that is not a going concern. Usually, if it is not, then a common valuation approach would be to value the company based on the liquidation value of the assets. This should be your last resort.

Is there anything that a new owner could do to improve the results?
This is a difficult question for many business owners to face. However, it is important to determine if there is a skill set that you as an owner are lacking (that a new owner may possess) that could potentially improve the prospects of the company. Perhaps an operator with a strong marketing background would be a great benefit. If this is the case, then this is something that must be identified – and showcased. A buyer who reasonably believes that they can turn things around by injecting a new skill into the operation may be an excellent prospect to buy a declining business for sale.

Have you bitten off more than you can chew?
Many business owners try to operate a business while they ‘keep their day job’ or perhaps even have another business that demands their attention. Oftentimes, this leads to a scenario where the business in question is not running at top capacity and could benefit from a hands-on owner/operator. If this is the reason for the business’s decline then perhaps you can demonstrate to a potential buyer the upside that exists if they ran the business with their full attention.


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Heike Ziegler

HEIKE ZIEGLER – YOUR #1 MARKET MULTIPLIER & BRAND MAGNIFIER Heike Ziegler is Founder and CEO of HZH International Brandconsulting UG and CELEBRITY BRAND MOVEMENT a company of HZH INTERNATIONAL BRANDCONSULTING UG specializing in brand, market and business development of brands, retailers and technology service partners in the fashion & lifestyle industry. Heike´s goal is to help you achieve brand-performance and enter new markets faster and easier than you ever imagined. As a veteran fashion designer with an international background, Heike masters complex topics such as the organization of an Omni-channel platform from the ground up and the implementation of new technologies as a service. Future-oriented trading strategies are made possible through advanced automated marketing and the analysis of the difficulties of users (brands & retailers) with a focus on the development and expansion of their intensive B2B relationships. Heike Ziegler provides solutions to strengthen the business performance of hundreds of fashion brands and retailers across Europe, from support through dedicated service networks and data conversion from marketing to providing a complete retail platform for brands and retailers to bring about long-term results. HZH-IBC serves as a platform for e-commerce, web application services/professionals, and for the creation of automated online marketing for the development of Omni-channel e-commerce solutions and trade applications for brands and retailers in the fashion & lifestyle sector. To transform the HZH-IBC platform into a marketplace where fashion and lifestyle brands meet with the trade for the successful sale of products and the joint business development, existing co-operations are being expanded and new partnerships are being developed. If you have any questions about Heike Ziegler success strategies and services, please email hzh@internationalbrandconsulting.com or call +49-172-913-999-5 or skype heike.ziegler60.