5 Mistakes to Avoid while Selling a Business
Selling a business is not an easy task; it takes a lot of preparation, patience and the careful guidance of an expert like a business broker to close a successful deal. If you are thinking of selling a business but have never done it before, you are bound to make some mistakes. The following are some common mistakes made by sellers, which you can be aware of and avoid:
Mistake #1: Not knowing the process for selling a business
The number one mistake you can make while selling a business is not being aware of the process. You don’t have to be an expert at selling a business, but as a seller, you need to be aware of the steps you need to take for closing a successful deal. You might get a lot of help with a business broker, but as an owner of a business for sale, you need to know how the selling process moves.
Mistake #2: Setting the wrong price
A major mistake many sellers make while selling a business is setting the wrong price. High expectations and enthusiasm lead a lot of sellers to over-price their business for sale. Always keep in mind that a buyer has his own team on his side, which guides him all the way through; he is not likely to fall for an over-priced business. A business for sale deal is also under-priced many times in the hope of selling a business quickly. This is also a mistake, as it makes the buyer suspect that something is wrong with the business, or else you wouldn’t under-price it. The right way to price a business is getting business valuation done through an expert, so that you can set the right price and your business for sale is sold successfully. Your business broker will know of a good valuation firm for your business for sale.
Mistake #3: Not maintaining confidentiality while selling a business
If you declare openly that you are selling your business, you may face problems with employees and vendors. Once word spreads that your business is up for sale, your competitors may also take undue advantage by trying to steal your clients. While selling a business, try to take only trusted people into confidence, rather than telling everyone. Select a reputed business broker who is experienced in selling businesses and can maintain confidentiality.
Mistake #4: Not developing the business after it is put up for sale
Once you have decided that selling a business is the best step you can take for yourself, it may be very tempting to stop making the everyday effort to develop your business. After all, the new owner will take care of it pretty soon, right? WRONG! Ignoring everyday activities of business and ignoring growth possibilities is a mistake many sellers make while selling a business. Remember that it may take up to a year for selling a business. If you ignore business activities for such a long time, the price you get for it ultimately will be lesser than what you expect. So keep running your business as usual if you want a good price for it in the end.
Mistake #5: Not hiring a professional business broker
The benefits of using a business broker have been stressed on time and again by industry experts. Not only does the business broker know the process of selling a business like the back of his hand, he will also have contacts which will help you close a successful deal easily. In today’s tough market, not hiring the services of an experienced business broker can be a huge deterrent for selling a business.
Keeping these mistakes in mind will help you avoid them and will make you a more confident seller while selling a business. Your business broker will be able to guide you further if you have additional questions.
Mistake #1: Not knowing the process for selling a business
The number one mistake you can make while selling a business is not being aware of the process. You don’t have to be an expert at selling a business, but as a seller, you need to be aware of the steps you need to take for closing a successful deal. You might get a lot of help with a business broker, but as an owner of a business for sale, you need to know how the selling process moves.
Mistake #2: Setting the wrong price
A major mistake many sellers make while selling a business is setting the wrong price. High expectations and enthusiasm lead a lot of sellers to over-price their business for sale. Always keep in mind that a buyer has his own team on his side, which guides him all the way through; he is not likely to fall for an over-priced business. A business for sale deal is also under-priced many times in the hope of selling a business quickly. This is also a mistake, as it makes the buyer suspect that something is wrong with the business, or else you wouldn’t under-price it. The right way to price a business is getting business valuation done through an expert, so that you can set the right price and your business for sale is sold successfully. Your business broker will know of a good valuation firm for your business for sale.
Mistake #3: Not maintaining confidentiality while selling a business
If you declare openly that you are selling your business, you may face problems with employees and vendors. Once word spreads that your business is up for sale, your competitors may also take undue advantage by trying to steal your clients. While selling a business, try to take only trusted people into confidence, rather than telling everyone. Select a reputed business broker who is experienced in selling businesses and can maintain confidentiality.
Mistake #4: Not developing the business after it is put up for sale
Once you have decided that selling a business is the best step you can take for yourself, it may be very tempting to stop making the everyday effort to develop your business. After all, the new owner will take care of it pretty soon, right? WRONG! Ignoring everyday activities of business and ignoring growth possibilities is a mistake many sellers make while selling a business. Remember that it may take up to a year for selling a business. If you ignore business activities for such a long time, the price you get for it ultimately will be lesser than what you expect. So keep running your business as usual if you want a good price for it in the end.
Mistake #5: Not hiring a professional business broker
The benefits of using a business broker have been stressed on time and again by industry experts. Not only does the business broker know the process of selling a business like the back of his hand, he will also have contacts which will help you close a successful deal easily. In today’s tough market, not hiring the services of an experienced business broker can be a huge deterrent for selling a business.
Keeping these mistakes in mind will help you avoid them and will make you a more confident seller while selling a business. Your business broker will be able to guide you further if you have additional questions.
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