The 7 most costly mistakes you can make when selling your business
Avoid the disastrous mistakes that can make your business simply unsellable or drastically reduce the price you achieve.
Discover the keys to achieving the optimum deal value when you eventually decide to sell your business.
Mistake # 1: Not understanding the value of your business
Asking for the wrong price is the most common reason for failed business sales. Ask too much and buyers simply walk away thinking your expectations are unreasonable. Ask too little and you could seriously undermine the value of the years of hard work and personal investment you have put in.
Mistake # 2: Having no exit plan
Having no plan for how you would hand over the reigns of your business on a practical level can serious undermine its attractiveness to buyers. With all acquisitions the buyer is looking to make an investment, not to buy more work or a new job.
Mistake # 3: Lack of preparation
Buyers will need to see up-to-date information in order to make a decision whether to submit an offer. If this is not available, out-of-date or cannot be backed-up, the buyer will most likely walk away. At the very least, the credibility and value of the business will be undermined.
Mistake # 4: Lack of confidentiality
The impact of your clients or staff knowing about your intentions before the deal is agreed could be devastating for your business and consequently its value. A strict and diligent procedure is required to maintain confidentiality.
Mistake # 5: Bad timing
The best time to sell is when you do not have to, whilst the revenue is growing and there is further growth potential for a buyer to exploit. Sell while you are still successful and enjoying it; it is harder to sell when you have to and have lost enthusiasm.
Mistake # 6: Not approaching the right buyers
You have executed your exit plan and prepared your business for sale, but if the ideal buyer for whom your business represents the ideal strategic fit is never made aware that your business is for sale, you could miss out on a very good offer.
Mistake # 7: Poor negotiation
You have found the right buyer who is keen on acquiring your business. But however sincere their approach, the buyer will be looking for the best deal. Mishandle the negotiation and you could undermine the value the buyer is prepared to pay.
Remember that the best deals are made when both sides win.