How to Sell Businesses that Don’t Make Money

Transcript

Andy and Jessica welcome you to another episode of The Deal Board Podcast. This week they are exploring for the first time a unique topic: How do you sell a business that does not make any money? Nonprofitable businesses are sold daily; many are just sold for the value of their assets and not at all for their income. Listen to this episode to learn the three different methods for business valuation and how each reflects different business models.

Listings of the week:
Patrick Bombardiere (Colorado) is selling a home-based business that is entirely relocatable. The owner sells and distributes different products on Amazon. The owner sells a “plug and play” system with no employees. This business is listed at $275,000. It is SBA-prequalified. Email Patrick at [email protected].
Dustin Audet (Dallas) is selling a franchise children’s hair salon. The business is listed at $200,000; the SDE is $90,000. The owner only works in the business from two to 10 hours a week. Call Dustin at (970) 618-9330 or email [email protected].

Key Takeaways

[1:40] Andy briefly introduces the three methods for valuation.
[6:16] There are more bad owners than bad businesses.
[8:37] Robert DiNozzi, Chief Growth Officer, Second Wind Consultants.
[9:57] Robert explains why great businesses could be over-leveraged for many reasons and how Second Wind Consultants assist them with the re-organization.
[11:14] What are some situations that a business owner must face in order to ask for the services of a consultant?
[13:22] An over-leveraged balance sheet creates an inability to bridge a gap.
[14:05] Robert explains how business reorganization works.
[16:21] How long does this business clean-up process take?
[17:17] Robert talks about the cases where the owner wants to stay in the business.
[18:28] Are there situations where Second Wind Consultants cannot help?
[20:01] Robert describes the process.
[21:57] Robert shares an example of a business.
[23:01] What is a merging cash advance?
[25:30] Robert shares his number one piece of advice: There are other ways to sell a business than just selling it in the traditional way.
[27:35] Listing of the week: Patrick Bombardiere (Colorado) is selling a home-based business, which is entirely relocatable. The owner sells and distributes different products on Amazon. The owner sells a “plug and play” system with no employees. This business is listed at $275,000. It is SBA-prequalified.
[30:44] Shelia Darby from BizWorth
[31:18] Shelia gives a little background about BizWorth.
[32:53] Shelia explains why her work is not just calculations.
[33:39] Andy and Shelia talk about the many factors that are involved in deciding what a business is worth.
[34:36] Shelia talks about how they approach valuation under the current economic world and its antecedents.
[36:59:] Shelia explains the three valuation methods.
[41:49] What does Shelia look at in an unprofitable business?
[43:15] Andy and Shelia discuss fair market value.
[46:25] Why does a business need a certified valuation?
[51:28] Listing of the week: Dustin Audet (Dallas) is selling a franchise children’s hair salon. The business is listed at $200,000; the SDE is $90,000. The owner only works in the business from two to 10 hours a week. Call Dustin at (970) 618- 9330 or email [email protected].

Mentioned in this Episode:
Call us — (888) 719-9098
Email us [email protected]

Call Robert Di Nozzi at 1-800-594-7473 or email him at [email protected].

Email Patrick Bombardiere at [email protected].

Call Dustin Audet at (970) 618- 9330 or email [email protected].

Mentioned in This Episode

• The Deal Board Podcast
• Subscribe to The Deal Board Podcast YouTube Channel
• The Deal Board on LinkedIn
• Transworld Business Advisors
• Transworld Business Advisors on LinkedIn
• Second Wind Consultants
• BizWorth
• United Franchise Group