Top Mistakes When Selling A Business. How Many Can You Avoid?
Florida based business broker, Emery Ellinger of Aberdeen Advisors, makes some interesting observations about the mistakes made by most business sellers and how this costs them both buyers and money.
These mistakes are explained over a series of blog posts, all worth reading.
TOP MISTAKES WHEN SELLING A BUSINESS:
PART 1:BEING THE KEY EMPLOYEE: By resisting the necessary delegation of power, authority, and responsibilities you not only hinder the ability of your business to realize its full potential, you also make selling it a hard proposition. Read the full piece here.
PART 2: LACK OF PREPARATION: You can only expect a profitable deal if your financial house is in order. It is important to have a solid financial system in place, properly recording critical data on daily, monthly, quarterly, and yearly basis. Read the full piece here.
PART 3: OVERVALUING YOUR BUSINESS: Pretending your business is worth a certain amount and expecting the prospective buyers to go along with it is rather naïve. Your asking price determines the fate of your business sale. Asking for way more than what your business is really worth could be the kiss of death for your hopes of a successful exit. Read the full piece here.
PART 4: SELECTING THE WRONG BUYER: It is essential to find a buyer who has the expertise and experience to run your company effectively. It is not only important for the future of the company, it can also dictate whether or not you will get the money you were offered. This is especially true if you end up having to finance the deal. Read the full piece here.
PART 5: WAITING TOO LONG TO SELL YOUR BUSINESS: Many business owners fail to realize the “peak” of their business, and try to sell it off when the business has lost all of its traction…Ironically, perhaps the best time to sell your business is when you do not have to! You cannot expect a good deal when your back is against the wall. Most business owners hesitate to sell when the times are good. Read the full piece here.
PART 6: SELLING YOUR BUSINESS WITHOUT PROFESSIONAL ADVICE: There are numerous financial and legal issues that need to be resolved before, during and after the sale of your business. Expecting to do it on your own is rather naïve…You would do well to get all the legal, financial and deal-making help you can get. Read the full piece here.
PART 7: ONLY TALKING WITH ONE BUYER: When it comes to the valuation of your business, the old adage comes to mind: Beauty is in the eye of the beholder! And nothing increases the perception of value more than realizing other bidders are also interested in the same business. Read the full piece here.
PART 8: HAVING ONE KEY CUSTOMER: Having one key customer with the power to dictate the financial prospects of a company is rather scary to a buyer and a glaring mistake on the part of the owner. Read the full piece here.
PART 9: A HANDS-OFF APPROACH: The ninth deadliest mistake is when the business owner decides to take a hands-off approach to selling their business. It can greatly reduce the chances of finding the perfect buyer for your business, negatively impact the value of your business and make the entire selling process slow and complicated. Read the full piece here.
Part 10: Only Entertaining All-Cash Offers for the Business: Most business owners refuse to accept any offer unless the buyer is willing to pay 100% cash on the closing of the deal. On the surface this demand seems perfectly reasonable. However, upon further inspection you may agree that it is downright unrealistic and extremely hurtful to the chances of finding a buyer for your business. Read the full piece here.
Related articles: How NOT to sell a business.