Selling Your Business and Can’t Find the Right Price

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

There are a number of options that are often suggested.

Is there an option that is right for you?  

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 may 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.  

 One or more of these options may suit you.  I do notice a sense of desperation in the listed options.  Desperation that on the surface looks like sell for a reduced price, sell no matter what, sell so I can get on with the next phase of my life.  Desperation will result in a price negotiation which often ends up in a reduced price.  

Instead of price being the discussion that your potential acquirer starts with would not an alternative position be the value your company presents to that acquirer?  

Wouldn’t it be even better to understand your company from that potential buyer’s perspective?  To understand what they, the potential buyer, want in your company.  Then make the changes needed to meet the potential buyer’s expectations.  

Does that sound better than the options listed?  

If it does sound better, do you know what the potential buyer expectations are?  Do you know how to meet the potential buyer’s expectations?  

Do you really want to sell your company?  We work with companies preparing to sell for value that allows the owner to live their lifestyle of choice for the rest of their lives worry free.  

We can help.  

If you would like to know how.  Request a conversation by commenting to this post.