What Mistakes Should You Avoid when You’re Selling Your Business?
There is precious little that’s easy about selling a business. Particularly if said business is one that you have invested time in creating and cultivating, there can be an element of nostalgic sadness that’s almost impossible to avoid entirely.
However, it’s important to cast emotions aside and realise that a business sale is still a sale and there are going to be people out there willing to take your business from you for less than its worth if you’re not prepared. To that end, here are some of the mistakes you should never make when it’s time to sell your business.
Failing to prepare
Every business will benefit from a little TLC before a sale. You wouldn’t attempt to sell your house when it was in a complete state, would you? The same should be true of your business. You need to make sure you run your business well through its final closing, and ensure that it’s in the best possible place before even considering a sale. That means sorting out your taxes, resolving any outstanding legal problems, ensuring the books are in order and that the staff are all happy and being paid accordingly. Because the better your business looks, the more it will be worth.
Keeping a distance
We understand that it might be a rather emotional thing to watch your business be pawned off to somebody else but it’s a major mistake to leave everything to the broker. Nobody is as motivated as you are to sell your business to the right people at the right price and while the broker will offer a good subjective opinion and expertise, it should always be up to you to make the final decision.
Selling too quickly
If you are too eager to sell then you’ll never get a fair price. If you have an incentive to sell quickly that’s either personal or financial then somebody is bound to take advantage of that. Take a breath first and think about potentially waiting for a while until the right offer comes along rather than jumping at the first offer that’s even slightly intriguing.
Waiting too long
On the other hand, you don’t want to wait too long to sell your business either. Nobody is aware of exactly how economic circumstances will play out in the future so you could be holding off on selling until things improve only to find they get significantly worse instead. The best way to know when to sell is simply to keep an eye on the economy and on your sector.
Don’t be overconfident
Of course, you should defend your valuation but there is a very fine line between being sensible and being overconfident. Your business is ultimately worth as much as the market is willing to pay for it, not whatever you think it’s worth.
Confidentiality is key
Finally, even if you’re considering selling your business you might want to keep it under your hat as that knowledge could completely change the way your staff view you and your company. It could even affect sales. So keep it private until the time is right.