When the time comes to sell a business, most owners begin the process with expectations for a quick and easy sale that results in the profit margin they need. Several months in they begin to ask “why isn’t my business selling?” when things don’t go according to plan. The truth is it can take months, even years to sell a business. Even then, the likelihood of your business selling is never 100%. Only 10% of small businesses for sale actually end up selling!
So what is the problem? Well it could be a number of things. Even if you think you have things in order, here are 6 questions below to ask yourself to help you determine why your small business isn't selling.
Are you working with a experienced, motivated, professional Business Broker?
Working with an motivated, experienced (and professional) Business Broker is going to help you on a number of levels. If your business isn't selling and you are not working with a experienced, motivated broker or agent, I would consider hiring one (make sure they are experienced and professional!) ASAP. A Business Broker will be able to take a look at your business and help you prepare it to be sold and priced correctly. They will also help you market your business and get it in front of a qualified pool of business buyers and be able to close quickly and without complications.
If you are currently working with a broker and the company still isn’t selling, take a good look at what the broker or agent is doing for you. As I said, these things take time so I wouldn't suggest dropping your broker for a new one after a 3 to 6 months on the market but start paying attention to what they are doing to sell your business. As time passes if you feel they aren't doing what they need to in order to help you sell your business then it may be time to consider hiring a new broker/agent/intermediary (this is more motivated, experienced, and professional)!
Is your business priced correctly? Is it too highly priced?
Selling price is one of the biggest factors that contribute to a small business not selling. Most overpriced businesses are not going to be attractive to buyers in today’s market because they have other options. If a buyer reviews a business and feels it is overpriced they may not even bother reaching out for additional information. The same holds true if the business is priced too low. Low prices raise a red flag for some buyers and they start to wonder what is wrong with the business that is priced below market value. If you have not already, get a professional to evaluate your business and place a value on it, then consider adjusting your sale price if it makes sense.
Is your business attractive to potential business buyers?
Not every business is a good fit to be sold on the open market. Some companies rely heavily on the owner’s skill set to be successful. Others have good profits on project work, but minimal recurring income. Other companies grow with just a few big customers that they rely on for a bulk of their income. Companies like these are not going to be attractive to potential buyers as they are often difficult to transfer ownership of and maintain the same level of profit.
Do you have a solid marketing strategy in place to market your business for sale?
What are you doing to let potential business buyers know that your business is for sale? If your broker is in charge of this, you should already know what they are doing, but if you do not, ask. You should have a marketing strategy in place to make potential buyers aware that your business is for sale. If you are trying to do this yourself, the same applies. With the ProSell Program at BizBen we have an entire selling strategy, protocol, and list for owner/sellers, brokers, agents to follow for success.
Are there things you could to make the business more attractive to buyers?
Sometimes it can be hard for an owner to look at their business objectively and be critical of it. If you can’t do it yourself, ask your business broker for help. Ask your broker if there things you could do to make the business more attractive. Maybe your business could use a little facelift to improve its physical appearance. Or, maybe you could build seller financing in to your sales pitch. Offering additional training to the new owner is also something you could consider.
Does your business have something to sell?
This goes back to being realistic with yourself and if you’ve been working with an experienced broker, you should have addressed this question at the start of your sales process. But, if your business is not selling it may be time to ask yourself, "does my business have something to sell?" While you may think you do, the opposite could be true and in this case you may want to consider other ways of closing up shop and profiting from some of your hard work.