This is my second post on this sub. I got some good feedback last time, so I’m hoping for some advice.
VERY long story short, my business hasn’t been making money since Covid. We are in the event industry, so though we are doing better than we were, we still never fully recovered from the world shutting down for a year.
Before Covid, we were doing amazing and had 0 debt. Now the business has over $800k in debt. We will end the year with about $1.1mil in sales and will have a net loss of about $150k all said and done.
Our brand is very well known and our social media presence is very strong.
My question is this:
Do I try to sell or do I just give up and file bankruptcy?
The main issue is, I am a single member LLC, but signed personal garenteea for the loans (I didn’t know how else to survive).
Thanks in advance for any/all feedback.
Some context on what is driving the operating loss will help us weigh in. Is it a pricey lease commitment? Wage and food cost increases? Are you booked for events but have no pricing discipline, as in are you chasing revenue?
If a good portion of the operating loss is driven by interest payments (either on commercial, SBA, EIDL, or RRF loans), then the business profitability may be different under new ownership.
Many people on this thread are confused about the difference between an asset vs stock sale.
I have a good, 2-min video on the difference here:
https://wabusinessbrokers.com/resources-videos/#buying-101
Businesses with $3M or less in revenue are transacted as asset sales 95%+ of the time.