The business you want to sell you must have built over many years and now saying goodbye to something that is so close to your heart can involve some unintentional mistakes from your side. However even under ideal circumstances selling a business is still an unnerving task, even when everything is sorted out you might feel you could have spent a little more time preparing, thinking about it and choosing other options, just may be.
Selling a business becomes a lot more challenging when the seller jumps onto the bandwagon without proper preparation, insufficient market knowledge and lack of their business’s value and legal documentation.
Because you cannot afford to mess up the critical stages of selling a business in the business-for-sale marketplace, here are a few mistakes that are likely to occur. Take yourself away from the situation and ensure you do not commit any of the following errors while selling your business:
- Not Spending Enough Time on Preparation
The actual process of handing over your business to someone else legally does not take a lot of time but what actually does is the preparation that went behind making that deal possible. A lot of first time business sellers are surprised when told the amount of time and effort it takes to properly prepare a business for business-for-sale marketplace. Right from the stage of determining its value to searching the market, gathering financial data and other legal documents, a huge list of things need to be sorted out before listing the business.
- Not Putting Together A Team
Another huge mistake business sellers usually make is they try and go solo. You are not a superman and you cannot be everything yourself and you certainly cannot make every decision all by yourself and consider it best in your company’s favour. Put together a worthy team of business broker, accountant, appraiser and other sale professionals after you decide to sell. These professionals ensure your company is truly ready for selling and that the entire process goes as smoothly as possible.
- Keeping The Expectations High
No one undervalues their business intentionally but to be able to sell your business you need to set your expectations right. A lot of business sellers who are most likely selling for the first time believe their companies are worth more than they actually are and then end up disappointed in every way. Begin by evaluating the market, check out recent sales of similar businesses in your area. That will help you gain more insight about the average sale price and how much you should be charging for your business. This is where your business broker will come helpful as well. Brokers are usually aware of the business dealings happening in their areas and since they have experience selling businesses asking for their expert opinion is always a plus.
- Selling At The Wrong Time
Selling a business is a lot more about analysing the market and making logical decisions than listening to your heart and letting your personal feelings become a hurdle in the way. Even if the economy looks good it still does not mean your industry is at its peak and it is highly likely that your selling position could be stronger few months from now. The team we talked about putting together helps you analyse the market, weigh the pros and cons of selling at that particular time, look at the company’s financial records and look at the deal from the buyer’s perspective before making the leap.
There are no guarantees in selling a business while not stumbling upon one problem or the other however what makes your business selling approach stronger is how well you plan your exit strategy. Be as systematic and methodical as possible and you will eliminate a lot of otherwise unavoidable mishaps.