If your company is struggling to make ends meet, you may be considering bankruptcy. It feels like all you can do to keep up with payroll, much less pay off what you owe. However, without going deeper into debt, you can’t get the materials you need to keep the business going. Eventually, you settle on an idea: Selling your business.
Is selling your business a workable idea when you’re facing bankruptcy?
The biggest issue that you’re facing is that your company is not profitable. It can be a tall task to sell someone else on the idea of taking on a company that isn’t earning money. What is their incentive? Do you have any leverage to push for a fair sale?
It all depends on the reason for your debt. In some cases, you may be able to sell another business owner on the idea that they can make money, even if you are not. For instance, one woman owed $1 million to a larger company. She found out that the machines that the company ran in its processing plant would be more efficient than her own. In short, if that company-owned hers, they would earn more than she was currently.
She went to them and pitched them exactly that idea: She wouldn’t pay back the $1 million that she owed. Instead, she’d sell them her company. Under their control, it would be able to earn back that $1 million and then much more. They would eliminate their debt and make a profit.
What should you do?
This example shows how you may have multiple options, from bankruptcy to a merger to selling outright. Be sure you carefully consider them all. When you’re facing complex issues related to your financial situation, your business and bankruptcy, it can help to have experienced legal guidance.