15
MISTAKE 5 # Failing to get organized for a sale
ahead of time and not operating the business
properly during the sale process
These two factors are interlinked, and as discussed
above, this is very avoidable if a qualified business
broker guides you well in the initial stages of
planning. Due diligence period of sale can be very
exhausting; the buyer and their team will require
you to provide many reports related to finances,
customers, marketing, sales, vendors, employees,
etc.
So, keeping updated records, organizing books
and records by separating personal and business
expenses, resolving pending and threating
litigations, tax issues, EPA compliances, licenses,
leases, staffing issues ect will tremendously help
you when the business is listed for sale because the
main goal for the owner during the sale process
is to run the business successfully and increase
the sales of the business and not to run around
organizing or resolve things which can affect the
business. It is not possible to fix everything at once,
and when you are organized, you will have plenty
of time to address any unexpected issues that need
to be addressed.
MISTAKE 6 # Not maintaining confidentiality
during the sale process
Confidentiality is a critical aspect in understanding
why it is not advisable for the owner to sell their
own business. Just imagine how hard it is for
a seller to talk with potential buyers without
revealing their own business/identity and take
phone calls during business hours. If the word
gets out that the business is on the market for
sale, employees may leave, in some cases, vendors
can hold back on deals, customers may leave,
and competitors will have other ideas; all these
can lead to disruption of normal processes,
potentially affecting sales. A good broker will
know how to market the business and maintain
strict confidentiality. Prequalifying the buyer is
very important, as you want to keep tire kickers
out of the picture and not disclose any sensitive
confidential financial information.
MISTAKE 7 # Not discussing transition, leases,
and other terms clearly till the last moment
Do not leave any unaddressed issues till the last
moment after all the effort and hard work you put
into the sale process, like discussing the transition
process ahead of time, talking to landlords at the
last moment can be deal killer if they substantially
increase the rent amount, employment contracts,
and issues with transfer of licenses or patents ect.
Selling a business is rarely easy. Selling your
business can be tricky. But if you follow our advice
and tips above for selling your business and avoid
these 7 mistakes, a lot of this frustration can be
reduced, and you will be able to make a sale happen
for the right price & terms.
RAAVI SRAVEN | CBI
raavi@urbanbusinessbrokers.com