Yes, it is possible to sell a business that is losing money. Buyers may still be interested in its assets, customer relationships, intellectual property or potential for improvement. However, financial difficulties can affect the asking price, available buyers and sale structure. The options also depend on whether the business remains solvent.
Three factors are particularly important:
- Reason for the losses: Buyers will want to understand whether poor performance results from temporary difficulties, declining demand, high operating costs or more serious financial problems.
- Underlying value: Even an unprofitable business may have valuable equipment, property, contracts, intellectual property or an established customer base.
- Financial and legal position: Outstanding debts, creditor obligations and cash flow pressures can influence how the business can be sold.
For example, a manufacturing business experiencing losses may still attract a buyer interested in its specialist equipment, customer contracts or production capabilities.
If your company is insolvent or at risk of insolvency, seek advice from a licensed insolvency practitioner promptly. Directors have legal responsibilities that may affect how a sale can proceed.
Read more: Can You Sell a Distressed or Struggling Business?
Considering selling your business? List your business on Valius to explore potential buyer interest, where an ordinary sale remains appropriate.
