FALL 2025
MISTAKE 3 # Having an unrealistic asking price
Pricing is the single most important factor that
determines how long a business stays on the
market, regardless of how good the business is.
Asking a premium for a well-organized(structured)
and good cash flow business is acceptable, but
asking an unrealistic value will mean buyers will
walk away. When a business is on the market for
a long time, it attracts the wrong buyers who are
looking for a bargain, which is exactly the opposite
of what you planned for when you listed the
business for a premium.
Many inexperienced sellers will value their business
based on their investment money and time, or
sometimes calculate the amount based on how
much they need to retire. None of these factors
determines the value of the business. The value
of the business is determined by many factors, to
name a few: current cash flow, seller discretionary
earnings (SDE), Future project earnings, Growth
potential, Desirability of a business(Trend), and
most importantly, market value of the business,
which is how much a similar business sold for. A
qualified business broker or a certified business
appraiser is key in valuing a business correctly, and
the main goal in valuing a business correctly is to
prepare backup material to defend the value of your
business.
MISTAKE 4 # Business not structured for a sale,
and the seller being an irreplaceable employee in
the company
This is mostly true for a small business. It is very
important to build and have a certain leadership
team that handles every aspect of the business,
making the business self-reliant like a well-oiled
machine, which keeps on running without a
snag. If the business owner is a key employee in a
business organization like leading sales driver/head
of operations/head of marketing ect.. and you have
decided to sell the business in the next year or two,
develop or train a employee in that role which will
be one of the biggest selling points of the business
and lay a foundation for smooth transition when
you sell the company.
Many inexperienced sellers
will value their business
based on their investment
money and time, or
sometimes calculate the
amount based on how much
they need to retire. None of
these factors determines the
value of the business.