Advice for Selling a Business in a Tough Economy

Feb 26, 2012

Before you put your business up for sale this year, you may want to give careful consideration to your reasons for doing it.  Beyond all the negotiation and marketing concepts, this is some of the best advice for selling a business.  Not only will you be asked this question by every potential buyer, but you also should know this so you can properly assess your own motivations.  You may be looking to move into a different direction or pursue a new venture, or perhaps you want to use the sale of a business to fund retirement.  Another reason you will want to consider this question is because other people will be affected if the business is sold, including your employees, managers and shareholders.

Is a sale the best solution?

A lot of business owners don’t want to hear this kind of advice for selling a business, but sometimes they might want to consider alternatives to selling.  In an economy that is barely recovering and threatened with the prospect of skyrocketing gas prices, this may not be the right time to start a new venture or simply retire.  There are a variety of other “exit routes” that may be more suitable to your needs.  For example, you could pass the business along to your children or sell it to your employees.  You could also try an initial public offering to raise capital and develop the business further.  Not only will this help you realize some long-term corporate goals, it will make you it easier to sell all or part of your stake in the venture.

Other options for selling your business

If you still feel that a sale will be more advantageous, a business broker may be your best option.  A broker can help you find a private-equity buyer, organize a management/employee buyout or attract a private investor.  Depending on the size of your business and the industry you are in, there may be several different ways to move forward, but a business broker can offer valuable advice on selling a business.

The buyer may also have an opinion on how to structure a deal and how they wish to make the acquisition.  Your goals for selling the business will be an important consideration when decision how to move forward.  You may decide to keep a small stake in the business and stay somewhat involved in its operation.  This will ensure the continuity of the business and it will also give the buyer confidence that it is a safe investment.