Many business owners decide to sell a small business for a variety of reasons, including wanting to retire or move on to other projects. However, the process is often lengthy and complex due to a number of issues that arise. It can be easy to miss critical steps or make mistakes that lead to delays and potential problems with the sale. Fortunately, by understanding some common business sale mistakes, you can avoid them and ensure a successful and smooth transition for the new owner of your company.
Mistake: Rushing the sale
While you may be excited to get cash in your hand, it is important to remember that selling a business takes time. If you attempt to sell a business too quickly, you may end up with less than what it is worth or leave important issues on the table that could delay the sale. Ideally, you should begin preparing to sell a small business at least a year before your planned sale date. This gives you the time to address key issues like employee contracts, intellectual property matters, and federal and state tax compliance. It also allows you to spruce up your financial records and strengthen your customer base before going to market.
Mistake: Overstating the value of your business
When putting your company up for sale, it is tempting to overstate the value of your business in order to attract buyers and encourage negotiations. However, this can backfire and damage your reputation as a reputable business owner. Rather than exaggerating your company’s value, focus on what is truly unique about your business, such as steady revenue or loyal customers.
Mistake: Not having a plan
When you are ready to sell your business, you will need to develop a clear plan and timeline for the entire process. Creating a timeline and plan will help you stay on track and prevent you from getting distracted by other projects or other issues that can derail your sale. It is also essential to have a backup plan in case your first choice of buyer falls through. Having a backup plan will also allow you to take the time needed to find the right buyer for your business. Learn more about these mistakes when you visit bizop.org.
Mistake: Not retaining professional guidance
As you prepare to sell your business, it is critical to enlist the help of professionals throughout the sales process. Trying to navigate the sale of a business without assistance can result in costly mistakes that can lead to delay or even a failed transaction. Professionals can assist you in determining your company’s value, finding the best platform to market it on and handling other critical issues that might arise.
If you are considering selling your small business, contact Baton today to receive a free business valuation and personalized feedback to optimize your business’s value prior to sale. We can help you set a reasonable price for your business and guide you through the sale process so that you can walk away with a maximum return on investment.