Common Mistakes When Selling A Business
Making it in business is really tough. Long hours are poured into the making of the business and it really is a thankless job. If you figure the hourly rate you received when starting your business, it would be dismal. Now the business is thriving and it may be time to capitalize on all that hard work. You won’t have to put those long hours in anymore. You can just take your lump of cash and walk away. There is a lot of planning that goes into selling a business and you have to be able to navigate the pitfalls. Here are the most common mistakes made when selling a business.
Most people do no find the right representative for their business. It is crucial to find a broker that is hungry and shares the same values as your business. After all, the buyer will do most of their interaction with this person and it is good to convey what the business stands for through this intermediary. Don’t just fall for the first high priced broker that you meet with.
A lot of people see the opportunity to sell pop up and they move quickly to get it done. This could be a mistake. Often times the move is so hasty that the important of window of opportunity passes them by. They don’t get the best price and the new owners may not be desirable. It is good to plan way ahead of the purchase. Get a valuation for the business and try to plan two to four years ahead of time. It is good to always be ready.
Most people don’t think about promoting or marketing their business and this can be a mistake. They just expect some interested party to walk up and offer a great price with benefits. Selling a business is like selling anything else – you want to drive up competition. Put the word out so that you get the most buyers involved. Hopefully a bidding war starts to drive up the price.
Negotiations walk a fine line. Both sides are trying to broker the best deal possible for themselves and a lot of business owners are timid or overconfident. Some take too little money for all their hard work and others scare buyers away with a really high price. It is important to get a fair valuation of the business before trying to sell so a good price can be found.
