Did you know it’s still possible to sell a business that is losing money? Obviously, it’s not a traditional transaction, but if you’re willing to be creative, you can relieve yourself of this burden and still sell a business that is losing money!
If you’re reading this article, you probably feel a lot like Atlas did…. that you have the weight of the whole world on your shoulders.
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Maybe the market took a turn for the worst. Or you lost a key client. Doesn’t matter now. Your business is in the red, you’re losing money, you’re struggling to make payroll, and you’re worried about your family mortgage, and your employees.
How To Sell An Unprofitable Business
Atlas was the titan of strength and endurance. As an entrepreneur and business owner, you have those qualities in spades. You’ve built your business and forged an enterprise. Customers, employees, and your partners all look to you to hold up their world. You’ve done it.
I speak with business owners every day who privately tell me they are exhausted, ready to move on because they just can’t hold the weight anymore.
John ran a carpet cleaning business in south Texas. Over the years, he had built that business up into a small chain serving hundreds of clients yearly. John had years of growth and prosperity.
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Eventually, like everything in life, John’s situation changed. Competition grew, demand fell, and John was forced to close a few stores. Like Atlas, he put the weight of running the business on his shoulders, taking on more of the day-to-day work to keep the company going. As always, when you do that, the company shrinks and, predictably, slowly slid into the red.
After a few years of negative growth and increasing debts, John had to sit down and admit a painful truth: he needed to sell. John had built a legacy that was providing for his employees and serving a need in the community. John agonized for months before finally deciding to sell.
So what happened to John? He decided to sell his business even though it was losing money That decision to sell turned out to be life-changing. He sold to an experienced investor who preserved his vision. The banks and creditors were willing to work with the new owner, who was able to preserve John’s legacy.
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If you are ready to sell a business that is losing money but want to preserve both your business and the legacy you built, then I recommend you sell to an investor. Why? Three reasons.
You’ve decided to sell, not to close down . The hardest part is for you to stop holding up the entire world. Ask yourself: What is in the best interests of the business? Take a step back from the center of the stage and imagine where the business will go without you. Better too: ask where you can go without the business weighing you down.
The goal now is to ensure that your legacy lives on and that your employees, customers, and the community can still benefit from your vision. You need to find someone who is interested in your vision and who has the experience and resources to turn things around. Find a qualified and capable buyer.
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Any serious buyer is going to want to know just why the business is failing. Get your books in order and prepare for an exam. Competent buyers will dig into everything. Need advice on what to
As you probably already know, owning a business is a complicated legal matter. You need to be prepared for what a sale will mean, and what your options are post-sale. I recommend you consult your legal advisors if you haven’t already done so.
Selling an unprofitable business isn’t always difficult. The right mindset can position you to both preserve the vision of the company and to create a better future for you and your family. Trust me. Getting out from under an unprofitable business can transform your life.
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Michael Palomo, the founder of MPact Ventures in McAllen, Texas, is an investor who focuses on solving the tough problems facing business owners, such as improving cash flow and becoming more efficient & cost effective, so they are successfully able to grow their business, get off the ‘cash flow rollercoaster’ and create a more stable way of life for themselves and their loved ones.Start your free trial, then enjoy 3 months of for $1/month when you sign up for a monthly Basic or Starter plan.
The first thing many business owners do to try and save their business is cut costs, but that only slows down the inevitable. What you need to do is breathe new life into a dying business by jump-starting it.
This article will help give your dying business the jolt of energy it needs to get back on the path to success.
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If you look closely, there are a few signs associated with failing businesses months before it happens. Some of these signs include a halt in business growth, poor cash flow management, and a glaring lack of innovation or differentiation.
There is no secret to success. But there are many factors that go into what makes you and your business successful. Sure, there is hard work and dedication.
But there are also more ways than hustling and grinding 24/7 to make it happen. Developing a positive growth mindset can help you stay on the path to success.
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This may sound a little “woo woo, ” or dubiously mystical and unscientific. Yet neuroscientific research has shown that our actions are triggered by intentions, incentives, or intrinsic values.
A growth mindset is defined by the belief that your intelligence is changeable and improvable. Individuals with a growth mindset see setbacks as a part of the learning process and “bounce back” by becoming more motivated.
It’s true that hard work is important, but staying headstrong and happy is even more important to achieving your goals. Use the above tips to achieve a healthy, balanced mind to get through the tough times.
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Now that your head is in a good place, it’s time to work toward turning that business around. Setting goals helps guide your focus and sustain momentum. Goals help you reach for a specific result when you feel like everything is falling apart.
Start small. Don’t go crazy by setting massive goals, because you’ll be disappointed if you don’t achieve them. Set frequent, smaller goals and reward yourself after completing them. Create a series of mini goals that lead to a big goal.
For example, say your big goal is to get 200 subscribers for your email marketing list. Your mini-goal list could look something like this:
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Don’t have a tried-and-true system for setting and achieving goals just yet? Build your own by reading 18 Essential Goal-Setting Tools for Entrepreneurs (2023).
It’s common for customers to shop around with other businesses. But if you’re getting negative feedback from customers, you need to find out why.
Establish a feedback system with existing customers. You can use an app like UserLoop or Fuzzy Surveys to collect feedback and understand what customers really want. This data can help you create better products and marketing strategies that increase sales and loyalty.
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A target audience is the group of people you aim marketing and advertising efforts at. Do you know who yours is? Identifying your target market is important because it helps you find new customers easier and bring more qualified buyers to your website, which results in more sales.
It took cosmetics brand SUGAR three years to truly nail down its target audience. “While we were running our ecommerce business between 2012 and 2015, ” founder Vineeta Singh says in a Masters podcast episode, “we realized that there were a lot of millennial women who couldn’t find that perfect nude lipstick or a perfect red lipstick. There were a lot of colors that were perfect for, say, Caucasian skin, but wouldn’t work on the deeper Indian skin tones.”
This led SUGAR to create its first bestselling product: liquid lipsticks. These lipsticks are extremely long lasting, which, with India’s humid and hot weather, are perfect for the brand’s target audience.
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SUGAR went from having one ecommerce store to over 10, 000 retail touchpoints, and has become an industry disrupter, raising more than $21 million in Series C funding.
If you’re a struggling small business owner, now is the time to take a step back and look at things from a broader perspective. That’s where SWOT analysis (strengths, weaknesses, opportunities, and threats) comes into play.
A SWOT analysis pushes you to look at your business from different perspectives and provides insight into how you’ll perform in the future. If you write a well-developed business plan, a SWOT analysis will be part of it.
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Strengths and weaknesses are internal factors, or something that you can control. Examples include reputation, partnerships, intellectual property, and staff. Opportunities and threats are normally outside your control, such as competitors, economy, market size, trends, and supplier issues.
A SWOT analysis will help get you back on track. It helps you identify problems, work on changes and improvements, and make the right decisions to help create a successful business.
Many issues can sprout up for
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