13
Most successful business owners plan, strategies
and work very hard over the years to build a
successful business but when it’s time to sell,
business owners make drastic mistakes resulting
in selling the company for a lower value (If the
business sells), stress, and all the hard work going
down the drain, it is basically like growing a tree
for many years but not be able to enjoy the fruits
of your labor. These mistakes are often easily
avoidable.
According to the data from BizBuySell and other
industry sources, it usually takes at least six to
eleven months to sell a business, and it is mostly
true in our experience of selling businesses, so this
article is about business owners who want help in
understanding the mistakes that avoidable and
make the process of business sale as smooth as
possible. Let’s look at the ten common mistakes to
avoid when you have decided to sell your business.
MISTAKE 1 # Not reaching out to the right
professional in the early stages of planning &
trying to sell your own business
In our opinion, if this first mistake can be avoided,
most of the other mistakes are very unlikely to
happen. Finding the right business brokers and
assembling a good transaction team with the help
of a business broker is crucial to your success.
Planning the sale with your team way ahead of
time (Depending on the type of business) puts you
and your business in the driver’s seat, especially
when you are going through this process for the
first time. Serious buyers are looking at many
businesses, and when you do not stand out, they
move on to the next business very quickly.
A good transaction team consists of a certified
business broker, financial team (accountant/
bookkeeper), Legal team (transaction attorney),
Tax Professional, etc. Speak to each professional
and make sure they have substantial experience in
selling businesses, and let your broker handle the
process and coordinate the entire sale process while
receiving constant updates.
MISTAKE 2 # Misrepresentation of business facts
to potential buyers in an attempt to sell quickly
As a business owner, it is your responsibility not
to misrepresent any facts to potential buyers. As
discussed above, the process of a sale is lengthy, and
if buyers find out any misrepresented facts during
the due diligence, they will back out immediately
and will have to start the process of finding the
buyer again, losing valuable time, hence hindering
the sales process. If the business sale goes through
and later the misrepresented facts are uncovered,
a legal proceeding can be very costly. Avoid the
temptation to exaggerate numbers for a quick sale,
do not hide any previous or ongoing litigations or
legal investigations, and disclose any unpaid taxes
or bills. Talk to your attorney and broker about
everything before passing the information to the
buyer and avoid any potential red flags that can kill
a deal.