It is not true that declining businesses never sell. They do.  But, key is whether there is opportunity for recovery.

A buyer needs to evaluate the business for opportunities to improve, change the model, enhance the product, etc.  Counter to improvement is whether the industry has reached its peak and recovery is possible.  Is it merely the economy that is dragging this business down.

The seller needs to understand that a bargain-basement price is likely the only way the business will sell.  Recently (2011) the market for selling businesses suggests that in year three of the current economic downturn, that of 2008 – whenever, business owners are realizing that to sell their under-performing business they must reduce the price.

A buyer needs to know that they need to buy a lower price in order to save capital to weather what could be a long recovery.  It is not bottom feeding as some suggest.  It is practicality.

In every transaction, caution and wisdom must prevail.  In transactions in difficult economic times, this can be no more true.