Inside of every business closed there is SOME value. From the machines, to the customer list, to the site, to the signs, to the website… I could go on.
Some of these selling for parts are relatively easy. If the business owner has material assets in the form of significant leasehold improvements, FF&E, inventory, transferable permits and licenses, or a coveted real estate location (whether owned or with favorable lease terms), they may still be able to find a buyer for these assets in place. The wild part is, they usually NEVER look.
Surprisingly, the majority of small business owners simply shutdown, without selling.
They are beaten down and tired. They have just lost their business baby. In fact, a business sold for its assets alone can be valuable (especially at a discount), regardless of its financial performance, and many buyers are searching specifically for these types of opportunities now. I am sure. In Yelp’s Q2 2020 Economic Average Report, it states 72,842 of the businesses on its platform have permanently closed as of July 10, 2020. That includes 15,770 restaurants, 12,454 retail businesses, 4,897 in beauty, 2,429 in the bars and nightlife, and 1,930 in the fitness industry.
But what if you can come in and give them an out, give them some cash or take care of some of their customers in the time of need. In this type of sale, you are acquiring the assets of the business and not an ongoing operation and its cash flow. So the model’s a bit different.