This is a relatively common scenario given it is a buyer’s market with many vendors currently experiencing low enquiry rates. Banks have tightened their lending which has restricted access to funding so here is a list of things you can consider:
- Review your Price Expectations – Five years ago you may have achieved a sales price of 3.5 times earnings, however, now you might only get 2 times earnings. Supply and demand have changed with baby boomers flooding the market with businesses for sale. You may need to drop your price expectations to find a buyer.
- Vendor Finance – Although not without risk, you can offer the buyer vendor finance. This could open up the market for your business and potentially solve the finance hurdle for prospective buyers.
- Sell your Business Internally – You could consider vendor financing the business over three to five years to an employee who has shown the ability and a strong interest in the business. It would help if you remain working in the business over the period to retain control and ensure you get your money.
- Sell to a Competitor – It may go against the grain but your competitors could be the best group to buy you out as they have the industry experience, knowledge and structures in place. Banks may look favourably on these purchasers.
- Hold Out – If you are set on your price and terms you will just have to be patient. You only need one person to be interested in buying your business but it might take a while to find the right match.
- Sack your Broker – You need a broker that is going to be pro-active, that will go out and find you that elusive buyer.