Sometimes entrepreneurs make mistakes in the process of selling their company. This is especially common when selling a business for the first time, or starting the process without the guidance and expert advice of an experienced business broker. Even small errors or omissions could have serious legal and financial consequences. Below we look at a few of the most common mistakes made when selling a business.
Planning or waiting too long
Unnecessary delays cause many entrepreneurs to miss good opportunities. It takes an average of six months to two years to sell a company. Therefore, long-term planning is the key to a successful sale. With good management and organized records, you are ready to start the process. If a buyer is interested, it will be clear what the value and potential of your company is.
Selling to the wrong person
Taking the first offer is usually not a wise choice. Even if it is a great offer, the terms of the sale, the business values of the buyer, and their passion for your business all need to be weighed. Many business owners think that the best person to take over their company is a familiar competitor, customer, supplier, or even a friend, but these buyers often have too few resources or do not care enough about the continued growth and success of your business. Identifying the most suitable buyer is a critical step to a successful takeover.
A wrong valuation
An asking price that is too high or too low is counterproductive. Expecting a lot of money for a company that generates little profit or shows few signs of future growth is not realistic. Run a benchmark; keep your current performance, market climate, competitors, and growth potential in mind when setting the price.
Selling without the expert advice of a business broker
Finding the right business broker or business advisor when selling your business is critical. Too often, business owners partner with the first person they meet to help them put their business up for sale. This can cost a lot of time and money in the long run. By taking the time to consult with a business broker, the chances of a safe and successful sale are greatly increased.
To learn more or get expert help selling your business or to read more here about the top four things to keep in mind when confidentially selling a business.