Financial experts will tell you that the absolute best time to sell a business is when sales are at their peak, but in practice, timing the sale of a business can be very hard. You may have expected profitability to remain high for a longer period of time that it has, or your peak may have occurred prematurely at an unexpected time. However it happened, you have found yourself in a state of declining sales, and you just can’t wait for things to rebound to sell. So what can you do?
It is possible to sell an Internet business when sales are declining, but it can be much more challenging. As a result, you need a smart strategy to ensure a smooth sale. Here are some tips to keep in mind to help give you the best chance of getting a good price while selling your Internet business when sales are on the decline:
- Consider holding on. Stand back and take a look at your financial situation and your overall financial picture. What has led to the decline in sales? Is it temporary? How long would it take to fix the problems or for market conditions to improve? Can you hang on that long? If at all possible, sticking it out a while longer and working hard to boost sales could be the smartest move you can make.
- Analyze the decline. Do some soul searching and determine just went wrong. Write down all of the factors that contributed to the decline in sales and then think about what could have been done differently to mitigate the factors or avoid them completely.
- Be upfront. Buyers will be able to see on paper that sales have declined, so don’t try to dance around the issue. Be completely open about the problem. Tell them how it happened. Even if it is embarrassing for you to discuss, buyers are more likely to spot potential opportunities in your company if you’re honest about mistakes that were made or things that may have been mishandled. Share the list that you made in Step 2 with buyers.
- Strategize for your buyer. Create a 3 to 12-month plan that the new buyer can execute to potentially build sales. Make sure to fill it with concrete, actionable tasks. For example, don’t just say, “Invest in marketing.” Provide an actual plan. Even if the new business owner does not choose to follow it, seeing a plan spelled out in writing can help boost his or her confidence in the potential for success.
- Be flexible about transitioning. Some buyers may feel better if you offer an extra-long transition period to help support them as they take over the company. Others may want a shorter transition period. Being willing to do whatever it takes to help the buyer succeed and feel comfortable with the purchase can help to improve the chances of a sale.
- Get realistic about price. You might have to resign yourself to making less money than you had hoped on the sale of your business. Although it’s disappointing, if you absolutely need to sell now, you may need to be willing to accept a lower price or to tie the deal to the ongoing performance of the company.
- Don’t be overly optimistic. A buyer will see through attempts to paint the business in entirely rosy colors. While you don’t want to make things sound bleak, it’s unrealistic to suggest that just by transferring ownership, the business will suddenly rebound completely. It’s much better to focus on providing solutions to the current sales problems than to make big promises that just can’t be guaranteed.
One of the smartest things that you can do when you’re selling an online business with declining sales is hire an Internet business broker to assist you. Often times, brokers have a pool of prospective buyers that enjoy the challenge of buying turnaround companies–those that are on the decline but still have the potential to be profitable again. A business broker can help you connect with these individuals and provide you with assistance and support while you prepare financial information, an asking price is established and prospective buyers are scouted out. With the help of an online business broker, you’ll have the best possible chance of a successful sale at a fair price.