5 Costly Mistakes To Avoid When Selling Your Business
Selling a business is a huge project. Most owners only go through one or two sales in their lifetimes, so it’s understandable to make mistakes along the way. Although the right business broker can help you navigate the process, it’s critical to be knowledgeable of and avoid these 5 costly mistakes when selling your business.
1. Inadequate Preparation
Before anyone sells anything, owners usually invest time and energy into making what their selling as appealing as possible. The same rules apply when selling your business. Simply putting it on the market and expecting buyers to come running is naive. You’ll need to spruce things up if you want an offer that’s worth entertaining. Here are a few areas to focus your energy:
2. Not Hiring a Professional Business Broker
You’re getting ready to sell your business; the company that you’ve put your blood, sweat and tears into. This is your baby, and if you try to sell it on your own, you will quickly see buyers trying to take advantage of your emotional state.
Not to mention, selling a business is a lot of hard, complex work. If you tried to do it on your own, you’d likely see profits dip and the value of your business diminish. This is the last thing you want when you’re trying to sell. You likely wear many hats as a business owner, but this shouldn’t be one of them. It’s too important.
Hiring a qualified broker helps level the playing field. From negotiation strategies to simple credibility, a broker can help position you and your business to pursue the best possible deal.
3. Not Being Involved in the Process
A broker will be essential in helping you sell your business, but they can’t do it alone. You’re still in charge, which means you need to actively participate in decision making and understand how those decisions will affect the future of your company. A broker will be an expert in selling your company, but you’re the expert in your business.
4. Focusing Only on the Positive
Keeping things light will only get you so far. A savvy buyer understands that you likely stumbled during the course of your ownership. Lying about it isn’t a good look. Buyers will find out the truth one way or another and if you get caught in a lie, they may walk. Be upfront with missteps or drawbacks about your business. Misrepresentations won’t only turn off a buyer, it could expose you to legal issues after the sale.
5. Not Thinking About Sale Structure
An offer for your business will feel so exciting. But before you get swept away and accept, consider the sale structure. The structure of the transaction can affect your long-term involvement in the company, your liability for anything that goes wrong, and the final sale price. Work with your business broker so you can decide on a sale structure that’s right for you.
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