It takes years of hard work and sheer perseverance to build a business. But then, one fine day, you realise that all is not well with your business. The alarm bell rings, and it becomes clear that it is time for a distress sale. There can be a number of things that can lead to this decision like growing debts or employee issues or the rent of the place which is excessive or just about anything else that brings the business to the point of unsustainability.
Here are the guidelines for selling your business in distress.
1. Get over the desperation
Circumstances can make you desperate but do not take hasty steps. You might just end up selling your business for peanuts. First, jot down all the positive points about your business. This is important as it will help in arriving at an accurate valuation of your business.
2. Consider all the reasons for selling
Ask yourself why you want to sell the business in the first place. Answer this question honestly. Is it that you have to put in too much effort, are the returns too low, are you making losses for too long, your competitors have taken away the market away from you? Evaluate all the reasons well.
3. Be honest with the staff
You will have to take your staff into confidence and tell them about your decision to sell the business. Employees will be affected deeply by this change in power. You need to tell them the real reasons behind your decision and also lay out a plan for the transition and who, or what types of roles will survive after the change of hands.
4. Keep your financial books updated
Would you take over a financially disorganised business? Then can you expect someone else to be interested in acquiring a business where the financial books are all in a mess? It is important that you update the financial books. For this, you can always take professional advice from advisors and accountants listed on Tobuz.com.
5. Get rid of the debts
If your business is neck deep into liabilities, then you will not be able to find a buyer easily. It is, essential that you either clear your debts or put a mechanism in place by which it will be cleared. Take your Bankers and Financiers Financial advisors on Tobuz.com can help you restructure your debt and present the finances of your company to potential investors more convincingly.
6. Draft a pitch
Before you are all set to sell your business online or offline, you need to draft a pitch. In this, you need to pin down all the pros and cons of your business. The experts at Tobuz can help you prepare a presentation that gives a holistic view of your business to potential investors.
7. Price your business sensibly
The pricing has to be based on facts. In fact, you have to keep all your emotions and sentiments aside when it comes to setting a price for your business. You cannot recover all the money for your efforts that you have put in the past, you can only capitalise on what you have right now.
8. Hire a good broker or advisor
Selling a business is complicated. You will need professional help. It is always better to go in for a good broker or advisor who can help in completing the process efficiently and within the stipulated time. Distress sales are emotional events. Professional brokers from Tobuz.com can help you overcome your prejudices and notions.
9. Get listed on platforms like Tobuz
Now, when you are all set to announce the sale of your business, the first thing that you need to do is announce it on the online medium. For this, the best option is Tobuz.com. This online platform is a marketplace for all types of businesses. It is a meeting point for buyers, sellers, and brokers. Sellers who are keen to sell their business can surely find a number of potential buyers on this platform.
10. Get the approval of the landlord
If you are working out of a hired premises, you have to get the approval of the landlord to sell your business to someone else. Arrange for a meeting with the new owner and ensure a rapport builds over time and the landlord becomes comfortable with the new tenant.
11. Sign the final contract
Many legal cases have emerged long after the business has been sold due to poor paperwork. The new owner drags the seller to court for damages or for information about the conditions of the business which they found to be not true. It is important to know what is included in the final price and what is to be left out. Leave this to legal wizards who can ensure every fine print is read, interpreted and secured in your interest.
Distress sales are much tougher compared to normal sale of a smoothly running business. The buyers tend to take advantage of your unfavourable situation. You may need a larger base of potential buyers to shortlist your final buyer. Online listing platforms like Tobuz.com help you discover potential buyers across geographies, and its ecosystem can help you go through the process of distress sale smoothly.