Common logic dictates that it’s better to buy than to sell during a recession, when prices are low. That’s certainly the logic that prevails in the property market, but is it also true of selling a business?

Certainly it can be a challenge to sell a business and get the terms you want, but it can be done.

The first thing you should do if you want to sell your business during a recession is to demonstrate that your company can show profitability in the peaks AND troughs of the economic cycle.

You should also prepare a plan that you can show to prospective buyers, detailing the growth potential of the business.

Finally, you must be prepared to negotiate payment terms. It’s a lucky seller indeed who can persuade a buyer to part with 100% of the money upfront, especially in the current climate. It’s more realistic that a buyer will want to negotiate staged payments or even an earn-out period.

Vendor-financed deals are working very well in this climate, but if this is something you want to pursue you should definitely talk to a professional advisor about the best way to structure the deal.

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This entry was posted on Sunday, July 19th, 2009 at 1:59 pm and is filed under Exit Strategies, Selling a Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.