Is it Possible to sell a Business that is Losing Money?

A business that is losing money is similar to buying a building that is half completed insofar as the foundation has been built and a tremendous amount of work and energy has been put into it, however it does not have any functional value. in fact it is a liability because although there currently not any functional value taxes and maintenance have to be paid on it.
Often times the project seems more difficult that the owners envisioned.  Many times they purchased it for a friend or family member who is mismanaging the project or taking advantage of them.
I analyze every business and ask the following questions:
Why is this business not making money?
What changes would be required to make this business profitable?
What type of buyer would this business be profitable for?
Is there a fatal flaw that makes this business unsellable?
Are the assets of the business worth more than the business as a whole?
I analyze the following assets

Under value lease: Many times the rents in the area have increased with inflation and due to an increasingly population, therefore it is important to compare rent and terms of the lease against comparable properties in the area.  Then perform a net present value calculation for difference between current leases that are being offered and the lease to the premises being sold to derive a dollar amount of this asset.

Renovation Value (including the cost and owners time for architectural drawings, building permits, renovations, builders risk insurance rent during the renovation period)

Value of current customer base (Even if the business is losing money)

Equipment Value

Inventory Value

Mailing List/ email list value

Exterior sign value

Employees Trained and in place value

Liquor license/ lotto – It is quicker to buy a licensed business and transfer the licenses than to apply for a new business.

Net present value of the companies earnings less an the owners salary (which mat vary from one buyer to another)


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