While the outcome of selling your business is worth celebrating, the process of selling a business can be a big challenge. We’ll walk you through the most common selling mistakes in this chapter.
Common Mistakes When Selling a Business
Even with its challenges, selling your business should ultimately be an exciting and enjoyable process. Keep the stress and frustration to a minimum by avoiding these costly and timely mistakes.
Failure to Think Ahead
The process of selling a business is much slower than buying one — it can often take years. This might be daunting for many, but the good news is that there’s a lot of time to plan. Failure to plan ahead can cause a rushed sale, which comes with a number of other problems. If you have additional stakeholders in your business, such as a spouse or other business partner, start the conversations about selling early to give yourself time to prepare. Also check in with your attorney or CPA to discuss what steps you should be taking in advance and what to expect down the road.
Skipping the Pre-Sale Clean-up
Performing a pre-sale clean up (see Checklist: Creating an Effective Business Exit Strategy) is one of the best ways to maximize the sale price of your business. It may seem counterintuitive to invest a lot of time and money into a business you’re not going to own in the near future, but ensuring your business is in top shape before selling is the best way to increase both the speed and price at which it sells.
It’s possible that selling your business may not go exactly as you planned, and you need to be able to pivot. Being inflexible on issues like buyer financing, whether it’s only accepting cash offers or refusing to offer seller financing, will give you an extremely small buyer pool. Even if a step of selling your business is taking more time, money, or resources than you expected, try to maintain a positive and flexible outlook.
DIY Business Selling
It’s tempting to cut costs on the overall price of selling your business by attempting to do things yourself but it can cost you more in the long run. Hiring knowledgeable professionals such as attorneys, CPAs, and business brokers can make a huge impact on the sale of your business. Especially if you’re a first-time seller, get the assistance and advice you need.
Asking Too Much or Too Little
Your asking price is essentially the most visible piece of marketing material during the sale of your business. The right price can help you get a great value from your sale, and the wrong price can mean losing buyers, time, and money. If your asking price is too high, you can turn-off too many buyers and lose trust. If your price is too low, you may attract the wrong kind of buyers or it could send the message that there’s something ‘wrong’ with your business.
It’s simple to avoid the most commonly made mistakes when it comes to selling your business. Plan ahead, stay flexible throughout the process, and don’t be afraid to ask for help during your business-selling journey.