Can’t sell your business? Here are six tips to make that sale happen

If a small business owner wants to sell their business but can’t find a buyer at the right price, what are their options?

Unfortunately, this is happening a lot in the marketplace at present.

Presently, we are faced with a buyer’s market and business owners trying to sell their business are experiencing low enquiries and hard negotiations.

Banks clamping down on lending has also not helped this situation and buyers don’t have access to funds as they did pre-GFC.

If you really wish to sell your business, the old adage of ‘meet the market’ will come into play.

1. Reduce your price expectations and asking price for the business

What you think might be the right price is not what the market thinks. Five years ago businesses might have been fetching 3.5 times earnings as a sale price, but now you may only get 2 times. You have to understand that times have changed and you need to change to fit in.

2. Vendor finance

You can offer vendor finance on the business. This will open up your business to a wider market of buyers. Yes, it is risky, but it is still an option.

3. Sell your business to your employee

You could vendor finance the business over five years to an employee who has always shown strong interest in the business. I would personally stay working in the business for the five-year period so you can help control the business and make sure you get your money.

4. Sell to a competitor

Have you tried approaching your competitors to buy you out? Often the best person to buy your business is a competitor. They have the structures in place with the experience which lenders like, so financing is a lot easier plus you could help out with vendor financing at a reasonable interest rate and earn more from the sale than previously thought.

5. Hang in there

It might take several years for you to find a buyer. If you are set on your terms and price, then hang in there. It only takes one person to buy your business and that one person may take some time to be found.

6. Sack your broker

Find a broker who is going to go out there and find you that buyer. This market needs someone who is proactive.