This is a common question people ask. The direct answer here is ‘Yes’. Any business, whether big or small, can sell. The problem is getting the best price. If you want to sell business, you need to have all the right reasons for doing so else you will be forced to sell at a loss.
Problems with selling young businesses
To sell business, you must consider its value. The assets of the business are the ones that affect the value the most. When talking about assets, we are not referring only to the tangible assets; the intangible assets do count too. With a new business, it is obvious you have not made much profit. In fact, new businesses make very little profits or even losses. This is because they are trying to get into a new market. This will obviously affect the selling price.
In addition to that, even where a new business is making good profits, its value will not be as good. It has no track record. Buyers may be skeptical about sustaining the profits. All things considered, selling a new business will not fetch a good profit. It is wise to wait for a firm to flourish before you sell business.
If you must sell business because it is not making any profits, the best strategy to use is that of liquidating assets. This will help recoup the startup investment or even help you make a profit. Therefore, if you are not finding a good buyer to buy your business, then liquidating your assets will be a better move. The downside is not all the money will have been used to buy assets. You should be prepared to make a loss. Talk to a business broker San Diego for advice if you must sell by liquidating assets.
The key reason why you shouldn’t consider selling a new business is because of the transaction costs. You will have to pay for legal and accountancy services. This is an added expense. Additionally, you have to pay for advertising and business valuation. The good news is there will always be someone out there willing to look past the newness of your business and make an attractive offer. Generally speaking, it will not be easy to sell business that has been around for only a few months.
What can you do?
You always have two options when thinking about selling a new business. The first option is where you count your losses and sell business at a loss. The second, which is the most recommended, is where you work on adding value to your business then sell it later on. You should consider other options such as mergers before you opt for the decision to sell business.
At the end of the day, it is only you who can decide what to do next; sell business or continue running it. Avoid rush decisions. Talk to the experts for advice. The business brokers, for example, will help find the best way forward.