sell-your-business

Selling a business is a complicated affair, and while you may know your business inside and out, that doesn’t mean that you’re fully prepared to sell. For this reason, business owners make tremendous mistakes every year when selling their businesses. You should avoid these mistakes. Let’s take a look:

1. Letting Word Slip

Your decision to sell needs to be kept under wraps. If your customers or clients catch wind that your business is on the market, this could severely damage the relationship that you have with them, which will in turn affect sales and your business’ valuation. Consider, also, that your employees might not be particularly thrilled to learn that the business that they work for is on the market. Keep things quiet!

2. Setting an Inappropriate Price

When putting their businesses on the market, some owners will simply ask for the price that they think the business is worth. That’s not good enough. You need to develop a full understanding of the value of your business, and use that as a means of dictating the price. If you set an inappropriate price, you’ll find it much harder to sell your business than it should be. What’s more is that having a firm idea of your business’ value makes negotiations far easier.

3. Fudging the Details

When you’re selling your business, any potential buyer is going to go over your financials with a fine-toothed comb. You know that’s true, because you would do the same yourself! So, as you’re attempting to be the salesperson selling your business, make sure that you’re representing your business accurately. If buyers discover that you’ve been exaggerating, that can scuttle a deal quickly.

4. Not Straightening Up

It’s not as simple as putting a sign in the window that says “for sale”. Consider selling your own home. If you were inviting potential buyers in, you’d make sure that your home was clean and looking its best, right? The same thing holds for your business, both in terms of its physical appearance and its financial appearance. Before selling, make sure your books are in order!

5. Only Going for the Lump Sum

Many business owners want all of the cash at once when they’re selling their businesses. This is a mistake. Entertaining offers that rely on payment terms or financing can be great for you, ultimately leading to you keeping more of the money in the deal. You know Uncle Sam wants to wet his beak in your capital gains; why would you make his job easier?

6. Not Hiring a Broker

This is the biggest mistake, and we hinted at it earlier. While you know everything there is to know about your business, that doesn’t mean that you’re qualified to sell it yourself. Sure, you don’t want to pay the brokerage fee, but, in most cases, you’ll find that you’ll ultimately make more (after the fee) from selling your business than you would going without a broker.

Ask For Help

And, jumping off that last point: don’t go it alone. Selling a business is a complicated affair, and you want to get it right. So, if you’re ever in doubt, make sure you can call someone who knows more about selling a business than you do.