After reading the article, you may have already recognised where sellers can make crucial mistakes. The following will refresh your mind as to where you need to take extreme care to prevent your selling adventure from becoming a disaster. Although there are certain areas that stand out, you should never lose focus of your goal and respect each area within the process with equal importance.
The first common mistake is hiring the wrong assistance: sellers will turn to the right advice but from the wrong people. For example, they will hire a solicitor but will often be attracted to the first contact they find and consequently overlook the more qualified and experienced people.
As a result, it can lead to the wrong decisions and advice being made at crucial moments in the selling process. The same scenario can be applied to business brokers and accountants.
Many sellers ignore the basic rules of valuation (if valuing themselves) and consequently overprice their business. By doing so, it will reduce the amount of interest to the business, and in some cases, eliminate interest all together.
Perhaps the most common mistake is failing to prepare the business for sale effectively. Sellers may believe that they have prepared well but realize the truth later when the potential buyer loses interest because of the lack of organisation. Failing to bring the business up to speed (refurbishments, amendments, performance, etc) may also have been the difference between selling the business and not at all.
When finding buyers, many sellers qualify people in a desperate attempt to get as many offers as possible. As a result, a lot of time is wasted liaising with buyers that are not serious which could have been used with the serious potential buyers that have now lost interest.
8a. Tips to Sellers
1. Make sure that your financial documents are up-to-date and as accurate as possible. Even if your business accounts reflect poor figures, buyers are often attracted to potential and therefore may see your business as the perfect acquisition.
2. Be prepared to finance the deal yourself. Many buyers today rely on the seller to help them buy your business and failing to offer this will reduce interest almost instantly.
3. Do not attempt to sell the business yourself. Buyers automatically have an advantage when they see that a seller is willing to go through the process alone particularly if they hire an army of professionals.
4. At least value your business with the help of a professional if you intend to sell the business alone.
5. Do not go into the selling process if you have outstanding problems in the business. Your business should have tied up any issues before you begin, but make sure they are tied and not pending.
6. Keep the sale of your business quiet to prevent issues arising such as negative attitudes from employees, customer and supplier actions, etc.
7. Sell your business at the best time. If your business performance is unfavourable, wait until it is showing promising results. Alternatively, identify the favourability of the current economical environment (interest rates, etc).
8. When talking to buyers get straight to the point and try not to waffle.
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