Business sale issue advice

[htasker]

Hi all-

Here's my situation: I sold a small web business earlier this year for a down payment $15K and financing for the rest. After a month, the buyer said that he didn't think he could make it work, in over his head and said he wanted out. He seems to be hard up so I kind of felt for the guy, on the other hand, now I had to take back the business and that cost me. I've offered $5K back as a good faith measure. Any advice here? Legally I can probably keep the DP but I'd rather settle amicably so there's no issues down the road.

[Zaphod]

Maybe you have thought of these but here are two thoughts that pop into my head. One, is there a board or some place you could suggest he sell it himself, possibly to break even? Two, could you buy it back and hand it over to someone else under a profit sharing, or partnership model? Profit sharing could even be more valuable than 15k over time, if the business is indeed viable in the right hands.

Do either of these seem like viable options?

[Curtis2011]

You don't have to take it back. It is purely your decision.

He bought it, he took the risk, he lost.

Don't let it sound heartless. You should not have to pay for his incompetence.

[htasker]

I didn't want the business to languish as we work out details, given that a big portion of it was financed. I don't thing a JV or profit sharing detail would work for the guy who bought it. I'm probably just going to take it back and resell it outright to a new buyer.

[SnerpGoodWord]

Originally Posted by Curtis2011

You don't have to take it back. It is purely your decision.

He bought it, he took the risk, he lost.

Don't let it sound heartless. You should not have to pay for his incompetence.

I think the issue is that OP is sitting on risk related to the buyer's creditworthiness and/or trustworthiness. That is, he believe he won't get paid the additional money owed if he doesn't take the business back.

Personally I would probably not have financed the deal in the first place, but then again I don't think much of web based businesses so I wouldn't want to have exposure to one. But given that you can't change the past, and without knowing financial details, I would try to close out your long debt position here. I would look for a buyer for the business at a much lower rate but in cash, connect him to the current owner, accept most of the money paid the current owner in lieu of the rest of the debt, and walk away.

The reason I give this advice is that if OP wanted to just run the business, he never would have posted here, or for that matter sold it in the first place.