Selling your business in a depressed market
So, you’re thinking about selling your business. But the market conditions aren’t ideal right now. Is there anything you can do to stimulate interest in your business, find a serious buyer and achieve the best price at the same time? Yes, there is. In fact, there are lots of things you can do to tip the scales in your favour.
We all understand that, in business transfer, markets fluctuate. Which way they’re swinging will determine who is in control. When they’re buoyant there is a surge in demand for businesses for sale, putting sellers in control. Conversely, when the market has slumped – and when there are more businesses for sale than there are willing buyers – then as a seller, you have less control.
Or do you have less control?
A depressed market is a buyer’s market, right? Buyers are in control because they have plenty of businesses for sale to choose from. It all comes down to the basic economics of supply and demand.
But they’re still buyers and they still want to buy a business for sale. You just need to convince them yours is the best business to buy. It all comes down to making your business irresistible.
Making your business stand out amongst all the others
If you’re selling a retail business, or selling a business with premises, then it needs to shine both metaphorically and physically. That means you’ll have to get the cleaning gear out. Call in some favours from friends and family if you need to. And then polish everything in sight!
The same goes for the fixtures and fittings, the décor and anything that will influence that all important first impression. Repairs needed on your commercial premises? Get them done now, don’t wait for an excited buyer to uncover them for themselves.
Holding a load of unnecessary stock? Sell it. Sell it cheap if you have to, but don’t put off a buyer by retaining unwanted clutter.
Website needs updating? Do it now. Or at least make sure everything you have online is current and consistent.
Office could do with freshening up? Imagine you are selling your home. Give your office the same care and attention you would if you were inviting an estate agent around to value it.
First impressions count
It might sound obvious, clichéd even, but first impressions really do count. Buyers will look into all aspects of your business. If they’re serious they’ll pore over your books and conduct proper due diligence. But making a positive impact at the outset gives you a far greater chance to sell your business, and at a price that suits you.
The key word here, of course, is ‘sell’. If you want to sell your business, then you need to pull out all the stops. Think about how the best salespeople, and the best marketers, operate. Prepare your business for sale in the most professional manner. Layout all the benefits in a clear and concise manner. Be bold, be loud and be proud. Remember, you’re ‘selling’ your business, so you need to take it to the stage and put on a gala performance.
What you shouldn’t do
As well as all the things you can do to sell your business in a depressed market, there are plenty of things you shouldn’t do either.
For a start, don’t cut back. Don’t lay off staff, don’t downsize and, whatever you do, don’t stop marketing and advertising. A buyer has far more leverage if your business looks like it’s winding down.
Of course, this all assumes you have some time on your hands. That you have some funds set aside to maintain investment in your business. That you can prepare your business for sale in the best light.
What if you need to sell right away?
Well, the most drastic and least self-serving method is to drop your asking price. If you’re desperate to sell your business, that might be your best option. But it could also put off serious buyers who’ll ask themselves why your business is for sale at a lower price than its competitors. To be clear: this should not be your primary strategy!
Let’s be honest, dropping your price too quickly and by too much smacks of desperation. As a business vendor, it weakens your position and a buyer will pick up on that right away. Fortunately, there are better options available to you, assuming you want to achieve a quick sale but are also realistic about the timescale.
Who can help you to sell?
Who you choose to help you sell your business, and how they go about doing so, is key. Listing your business for sale on sites like Daltons Business is a great place to start.
You can also do your research and choose a business transfer agent to help who really knows what they’re doing, and has the successful track record to go with it. But don’t just sit back and wait for things to happen. Be proactive, be a nuisance, do whatever you can to ensure your agent is working tirelessly to sell your business.
Remember all the tips from this article, and above all else, remember that first impressions count. Clean your offices today. De-clutter your storage space. Paint your showroom at the weekend. None of this costs a great deal, nor does it take that much time.
Invest in professional photos for all your promotional materials too. Really ‘sell’ your business in every advertisement. And put together a detailed Information Memorandum document to hand out to every serious buyer that comes your way.
Selling your business is a competition whatever the market conditions. And the winners are the ones that put the most effort in. So, don’t worry. You can sell your business in a depressed market. You’ll just need to work a little harder than everyone else.