Mistakes to Avoid When Selling Your Business
Mistakes to Avoid When Selling Your Business
To ensure a successful transaction
Are you selling your business? If so, make sure you avoid the mistakes listed here to ensure a successful and profitable transaction.
Selling your business?
In 2018 there were 30.2 million small businesses in America. In 2015 small businesses employed 47.5% of the private workforce in the U.S.
But there comes a time in every entrepreneur's life when they are ready to move on and sell their business. While the reasons for selling your business may vary, the goal is to walk away with a tidy profit.
You have to know what you're doing to ensure you sell your business for the most money. And there are tons of mistakes you can make.
If you're looking to sell your business, keep reading. We're sharing with you the biggest mistakes entrepreneurs make when selling a company.
Always Be Prepared Before Selling Your Business
Just like a well-thought-out business plan can help you grow your business, you need to do the same with your exit strategy. It's hard to get exactly what you want when you don't know what that is.
Collect Your Documentation
You'll need to gather a few key pieces of information in order to sell your business successfully such as:
Sustainable profitability projections
Identify and address lease issues
Identify and address staffing problems
No one wants to buy a business that isn't well run and well organized. This information will also help you set the price for your business that's on par with the current marketplace.
Plan Ahead and Start the Process Early
If you really want to be prepared to sell your business, begin the preparation process at least two years before you list it for sale.
Qualify Your Buyers
Another common mistake is not properly pre-qualifying prospective buyers. While you may think that qualifying a buyer too soon will scare them off, usually the opposite is true.
Instead, the pre-qualification process helps draw those buyers deeper into the sale. If you're worried about giving buyers access to sensitive information, have them sign documents such as a confidentiality agreement and financial background information.
This process will help you attract only serious buyers which means you won't waste your time wooing the wrong buyers.
Hire the Right Team
While it may seem like a good idea to try to save some money when selling your business by not hiring professional help, it's usually not. There's just too much at stake.
An investment broker and/or business broker can help you present your company in the best light.
How a Broker Can Help
They know exactly which databases to advertise your business on. They also know how to do the following tasks:
Preparing documents
Identifying buyers
Generating interest
Soliciting offers
They'll also help close the deal as quickly as possible.
How Other Professionals Can Help
But you may also want a transactional attorney to help with the following tasks:
Preparing an asset purchase agreement
Negotiating an asset purchase agreement
Handling documentation such as bills of sale and officer certificates
An accountant can help you structure your deal and help you plan ahead of potential taxes you'll have to pay. And a business appraiser can help you evaluate your business so you know what it's really worth.
Work With Us
Selling a company is a difficult process. It's important to surround yourself with the right team to help you save time, money, and prevent potential problems from arising.
We can help. Our team of knowledgeable experts can help make selling your business easy. Click here to learn how.
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