What to Do If Your Business Is Unsellable
Did you know that an estimated 30% of small businesses that go up for sale actually get sold? That leaves 70% of business owners with no buyer and no clear path forward when they’re ready to retire (source).
If you’re a small business owner thinking about selling, it’s crucial to understand that the process is not as simple as listing your business and waiting for a buyer. Many small businesses face significant hurdles in finding a qualified buyer willing to take over operations at a fair price. If you can't sell your business, then you need a solid plan for securing your financial future.
Why Selling a Small Business is So Difficult
Many business owners assume their business will be their retirement plan, but the reality is that small businesses—especially those with modest profits—are often unsellable. Here’s why:
The Smaller the Business, the Harder It Is to Sell
The marketability of a business depends largely on its financial performance. If your business generates less than $100K in net profit annually (after paying yourself a fair salary), it will be challenging to attract serious buyers. The reason is simple: most buyers want a return on their investment, and a small business with minimal profits offers little incentive. If your business barely breaks even or has a low net profit, it may be more practical to shut it down rather than spend years trying to find a buyer who may never materialize. Remember, you’re not selling it to someone like yourself, you’re selling it to an investor who wants a return on their investment.
Owner Dependence is a Deal Breaker
If your business revolves around you, it’s not really a business—it’s a job. Buyers are looking for investments, not employment opportunities. If you are the one managing customer relationships, performing specialized work, or making all key decisions, potential buyers will see your absence as a major risk. A business needs to function independently of its owner for it to have real value on the market.
Here is a simple test. If you, as the business owner, left for a month or two, would your business continue to run without you?
Brokers May Not Be Worth It for Small Businesses
Hiring a business broker might seem like the logical step in selling your business, but the economics often don’t work for smaller businesses. A competent broker spends hundreds of hours preparing a business for sale, conducting marketing efforts, screening buyers, and handling negotiations. To make it worthwhile, brokers typically focus on businesses valued at $500K–$1M or more. If your business is worth less than that, you may end up with a low-quality broker who does little beyond listing your business on a generic website. In many cases, you’re better off selling the business yourself or working with a trusted financial professional to explore other options.
Buyers Are Extremely Selective
Purchasing a small business is a high-risk investment, and potential buyers know it. Most buyers conduct extensive due diligence, which can cost them $5K–$10K or more per business they investigate. For a business worth only $50K–$100K, this level of risk and expense is often not justifiable. Additionally, buyers are not interested in “potential”—they pay for what a business is currently generating in profit, not what it could achieve with better marketing or new investment.
Location Severely Limits Your Buyer Pool
Unlike larger companies that attract buyers from across the country or internationally, small businesses typically rely on local buyers. For a buyer to be interested, they must live nearby or be willing to relocate. This severely restricts the number of interested parties, particularly for location-dependent businesses like cafes, retail stores, or service-based businesses.
Some Businesses Just Aren’t Sellable
At the end of the day, some businesses simply don’t have enough transferable value to attract a buyer. If your business isn’t generating strong profits, relies heavily on your personal involvement, and lacks tangible assets, it may not be worth selling. In these cases, the best option may be to close the business and focus on preserving wealth through alternative financial strategies.
If You Can’t Sell, You Need to Prioritize Retirement Savings
For business owners who were relying on the sale of their business to fund retirement, an unsellable business can be a major wake-up call. If you can’t sell, it’s crucial to start building personal retirement savings as soon as possible. Fortunately, there are several retirement plans designed specifically for small business owners:
1. SEP IRA (Simplified Employee Pension Plan)
Ideal for self-employed individuals and small business owners.
Contributions up to the lesser of 25% of employees compensation/ net earnings or $70,000.
Contributions are tax-deductible and grow tax-deferred.
2. Solo 401(k)
Designed for self-employed business owners with no employees (except a spouse).
Allows higher contribution limits than an IRA, with both employee and employer contributions.
Offers tax-deferred growth and Roth options for tax-free withdrawals in retirement.
3. SIMPLE IRA (Savings Incentive Match Plan for Employees)
A great option for small businesses with up to 100 employees.
Employers are required to contribute, either through matching or a flat percentage.
Easier to administer than a traditional 401(k) but still provides tax advantages.
4. Traditional or Roth IRAs
Available to anyone with earned income. Payments from social security, pensions, and tax-deferred retirement accounts are not earned income.
Traditional IRAs offer tax-deferred growth, while Roth IRAs provide tax-free withdrawals in retirement.
A good option for supplementing other retirement savings plans.
For a more detailed breakdown of these plans and how they can help small business owners secure their financial future, check out my in-depth guide on retirement planning for small business owners.
Steps to Take Now
If your business is unlikely to sell, here’s what you should do:
Assess Your Business’s Marketability – Be realistic about whether your business has transferable value. If you determine that a sale is unlikely, shift your focus toward alternative financial planning.
Start Saving for Retirement Immediately – If you’ve been reinvesting everything into your business, it’s time to start prioritizing personal savings. Explore retirement accounts that fit your needs.
Reduce Owner Dependence – Even if your business isn’t sellable today, making it more independent can improve its chances in the future. Start training employees to take over key responsibilities.
Consider Liquidation Strategies – If your business has valuable assets (equipment, real estate, inventory), consider selling them separately to maximize value.
Work with a Financial Advisor – A professional can help you develop a strategy to transition from business ownership into a secure retirement.
Final Thoughts
Relying on your business to fund your retirement is risky—especially if your business is unsellable. The best way to protect your financial future is to build personal savings through tax-advantaged retirement plans while your business is still operational. If selling your business is unlikely, start planning today to ensure a comfortable and financially secure retirement.
For a deeper dive into small business retirement strategies, read my full guide here.
The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.
This content not reviewed by FINRA
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