Despite the fact that barely anybody does it, planning alternatives to selling your business is a fantastic negotiation tool that could help you sell your business for more…

Picture this: after six long months on the market, you’ve finally found a buyer for your business. You want out and they want in, and what’s more it’s well and truly crunch-time. You have no alternative to selling, no other viable buyer, and you don’t want to (or can’t) be in the business anymore. Then at the 11th hour, your buyer comes back with an extremely low ball offer and won’t budge.

What do you do?

Do you take the offer and end up with less for your business? OR do you push back for more money and risk losing the sale all together?

Neither choice is a perfect one and you can’t possibly know which one is better until you’ve already made the decision.

Here’s where planning NOT to sell comes in handy. Planning a good alternative to selling adds a third option to that conundrum. This takes the pressure off you which means you don’t have to accept your buyer’s lowest offer or risk losing the sale completely. Having this third option available is a fantastic fall-back option that you can use to give you backing during negotiations. You might even get more for your business as a result. So what are some common alternatives to just selling?

  • Commit to stay with the business and invest in building it and increasing it’s profitability for the long term.
  • Do the above and eventually hire a manager to reduce the load on yourself.
  • Do the above two things and sell it after a year or two for a whole lot more.
  • Close and sell the stock, fixtures and fittings to minimise your losses.
  • Consider alternative sale arrangements; 50-50 split, staged buyouts etc
  • Sell, but remain employed with the business as a paid consultant for a period of time.
  • If you’re in real trouble with debt you can consider liquidating.
  • Seek a similar business to merge with. For the right type of business this could increase profitability and reduce risk.

These are just a handful of suggestions (and there are definitely more options), but really the more options you have to selling, the better it is for you and for negotiations.

By the way, this isn’t to say that you shouldn’t accept the low ball offer if it’s still your best option. You really need to weigh up your alternatives and pick the best one. Sometimes under the right circumstances, a low-ball offer might actually be your best offer, something that we wrote about in this blog: (Click here to read about it), so you need to keep that in mind.

Now, as we’re business brokers, it’s our job to sell businesses, so it might seem against our best interests to suggest that you not sell your business. That’s not what this blog is actually about. Really, if you want out, then selling is the only cut-and-dry option with a high return. These alternatives are important to a) reduce the stress on you during the selling process (which can be more disruptive than you think) b) give you extra ammunition during the negotiations (to help you sell your business for more) and c) Give you a handful of options should the sale not go through.

These three things are actually good for your business sale and can help it go through smoother and quicker. So in that respect, it’s a chunk of advice that helps both us and you. Good luck with your planning!

By Zoran Sarabaca
Principal Xcllusive Business Sales Pty Ltd
Sell your business with Certainty.

Would you like to talk to us about your situation? Need help with selling your business? If so, we’re happy to help, just give us a call on 02 9817 3331 or fill an enquiry on this site by clicking here.

We look forward to talking to you.

DISCLAIMER: The information contained in this blog is for information purposes only. It is not meant to be considered as business advice. The points of view expressed represent reactions to the current business market and it should be noted that the market may be subject to change in the future. Reader’s specific circumstances may be different and have not been taken into consideration. Always consult with your professional advisors for any business advice.