Selling a business can be challenging, and many business owners struggle to find a buyer. In fact, according to the Small Business Administration, only about 20-30% of businesses that are put on the market end up being sold.
Don't be that statistic!
To help you avoid common pitfalls that can derail a sale, I've compiled a list of the eight most typical mistakes business sellers make.
By understanding these mistakes and taking steps to address them, you can increase your chances of a successful sale and maximize the value of your business.
1. Overvaluing the Business: One of the biggest mistakes business sellers make is overvaluing their company. While it's natural to want the highest possible price for your business, you'll likely turn off potential buyers if you price it too high. Be realistic about your company's value and price it accordingly.
2. Failing to Prepare Financial Statements: Before putting your business up for sale, it's crucial to have accurate financial statements prepared. Failing to do so can lead to mistrust from potential buyers and make securing a deal more challenging.
3. Not Addressing Legal Issues: Legal issues can be a significant stumbling block when selling a business. Before putting your business up for sale, address any legal issues and ensure that all contracts, licenses, and permits are in order.
4. Neglecting to Maintain the Business: Potential buyers may assume that deeper problems are lurking beneath the surface if your business appears neglected. Before selling your business, address maintenance issues and ensure the company is in good shape.
5. Failing to Consider Timing: Timing is everything when selling a business. If you try to sell your business during a down market or a period of low demand for your product or service, you may have a more challenging time finding a buyer.
6. Keeping Too Much Control: One mistake business sellers often make is holding onto too much control of the business during sales. It's important to allow potential buyers to look closely at your business and have some control during the due diligence.
7. Not Being Prepared for Due Diligence: Due diligence is critical to the sales process. It's essential to be prepared to answer potential buyers' questions and provide all necessary documentation.
8. Failing to Hire a Broker: One of business sellers' most significant mistakes is failing to hire a broker. A good broker can help you navigate the sales process and can help you find the right buyer for your business. I know you will think that this is self-serving because I am a Business Broker, but it's not! You need someone who knows how to SELL your business if you are committed to it.
Sign up on my website, www.cvbusinessbroker.com, to get more tips on how to sell your business.