Getting Out When You're Bleeding Cash
by Janet Attard
Ask Business Know-How experts for small business and home business advice.
I own a small cafe that is not doing well and I would like to sell it as soon as possible. I know it is only worth the value of the equipment. I still have a year left on the lease. My question is how to go about selling it? Do I find a business broker or put an ad in the newspaper? And if I do sell through the newspaper, how do I go about the paperwork part of the sale? I have limited funds and they are getting more limited everyday. help!
--Frustrated in Fresno
If there is no hope of turning the business around, consider auctioning the assets off. "The key is limiting the expenses," says Jack Slick, partner in Flurrie and Slick, an accounting firm located in Haggerstown, MD.
"A broker or ads in the paper won't stop the pain immediately. An auction closes it down right away, will probably bring as high a price as could be gotten by selling it all at once, and keeps the seller from being strung out over the negotiation process. If it is losing money the less time between the decision to sell and the sale of assets is paramount. If by chance the business can be turned around to where it was breaking even or making a small profit it may be more lucrative to wait for that to occur and do everything possible to get it there. If it can't, then don't wait. Schedule the auction."
Look in the yellow pages and in the business section of the major newspapers in your area to locate auctioneers. If you do go ahead with the auction, tell your landlord that your losses are forcing you to close the business and ask if they'll cancel your lease. Although it's unlikely, you never know. They might agree.