6 Mistakes a Business for Sale Owner Should Avoid while Selling a Business
Putting up a business for sale is a life-changing decision, one that has the potential to accomplish your life's goals. You want to see the business you built from scratch go into the right hands at the price you deserve for it. But closing a successful deal for a business for sale is not as easy as it sounds. The entire business selling process is a complicated one. We've compiled some commonly observed mistakes which you can keep in mind while planning to sell your business.
Selling a business requires a lot of planning and preparation, at the end of which you can expect to close a successful deal. Before even considering putting up your business for sale, you need to evaluate your goals and what you wish to achieve through the sale. Once you have your goals chalked out, you can go about finding out how to achieve them. Remember, it takes anywhere between a few months to a year for a business sale to take place. Without preparation, it may take even longer or result in no deal at all.
The right time to sell a business is not necessarily when your business is not doing well; it is when your profits are at its best. The timing is a crucial factor in making or breaking a business for sale deal. So don't wait for your business performance to move southwards before you start thinking of selling it. Putting up a business for sale when it's not doing well can make it a hard deal to bargain for. Instead keep the sale of your business always on your mind, especially when it is doing well. If you sell at a time when you have no other choice, you will lose the winning edge for making the deal. A great profit statement is hence your best selling point.
Pricing is another issue which breaks deals many a times. While looking at a business for sale, a buyer will look at its turnover, profits and financial situation to judge how much he/she should pay for it. If you demand an unreasonable price, the buyer will be put off even before negotiations begin. Many sellers also make the mistake of under pricing their business for sale, thinking that it will attract more buyers. In fact, all an under-priced deal does is put the doubts regarding the feasibility of the business in the buyer's mind. Ask your business broker to get a fair business valuation which will give you an idea of the asking price to put on your business for sale.
A buyer judges the potential for a business for sale through the financial documents and information that you provide him/her with. Lack of such details is a deal killer. So have all business documents and financial details prepared in advance so that the buyer may judge the feasibility of the deal quickly and you can sell your business with ease.
In one's haste to close the deal, it is very tempting to accept the first bid for a business for sale. But having only one offer makes the seller lose ground in negotiations and doesn't necessarily bring in the best price. Consider all the options you have and select the buyer you think will be able to run your business successfully in the future.
This is a mistake many businessmen make while putting up their business for sale. Managing your business efficiently and trying to sell a business are both full time jobs. It's difficult for one person to juggle both since each needs a dedicated person to look after it. If you try to do both at once, one of the 2 things will happen: you will either be unable to look after your day to day business while looking for a buyer or you will be unable to find the right buyer. The solution to this dilemma is simple: hire a professional business broker. A business broker will not only know how and where to look for people looking to buy a business, he/she will also be able to handle tough negotiations on your behalf. The cost of a business broker will be worth it when you will have made a successful deal, with your business sold to an appropriate buyer.
Great post and it is true. I would like to take on this strategy and see what happens.
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