Top 12 Mistakes to Avoid When Selling a Business
Derek van der Plaat lists his top twelve mistakes that vendors make when selling a business. Derek’s list overlaps with lists others have put together on seller mistakes including this one at Entrepreneur.com, this Five Mistakes list and the Ten Mistakes That Result In Losing Value.
Common elements in most lists are the business not being prepared for sale and … not using professional expertise with marketing the business and/or finding investors.
Here are 12 potential mistakes that can make the difference between a home run or a strike out. I have illustrated from time to time why sellers make certain choices as to when and how they pursue the sale of their businesses. In this article, I will group the common mistakes that a seller must avoid in order to land the highest price and best terms on the sale of his/her business.
Mistake # 1: A Must-Sell Situation
Mistake # 2: Not Managing the Process in a Timely Manner
Mistake # 3: Critical Reliance on the Seller
Mistake # 4: Restricting the Buyer Universe
Mistake # 5: Unrealistic Price Expectations
Mistake # 6: Lack of Specificity in the Letter of Intent
Mistake # 7: Proceeding With an Unfunded Buyer; No Counter Due Diligence
Mistake # 8: Ignoring the Soft Factors; Can You Work With These Folks?
Mistake # 9: Neglecting Day-to-Day Operations
Mistake # 10: No Plan B
Mistake # 11: Overly Aggressive Seller Forecasts
Mistake # 12: Engaging the First Unsolicited Offer
Also, How NOT To Sell Your Business
In the words of late American TV host Sam Levenson: “You must learn from the mistakes of others. You can’t possibly live long enough to make them all yourself.”
When it comes to selling businesses the biggest mistakes have, hopefully, all been made. In the grand tradition of learning from the failures of others, what business-selling mistakes do we need to avoid?