Selling a business can be a great way to turn a large profit, but only if you do it right. By making any one of many common mistakes, you can lose out on huge amounts of money.
If you want to sell a business, or plan on selling one in the future, read on to learn the four key mistakes to avoid so that you get the most out of your efforts.
1. Not Having a Selling Plan
If you're wondering how to sell a business, you're on the right track. Too many people jump ahead to get it over with and don't make a solid plan for selling their business. Not having a plan means you'll be unprepared when the time does come.
Big investments take a while to sell someone on, and once they're ready to buy, you'll want to make sure the process is as smooth as possible by having all the records and paperwork in order.
This will also show potential buyers that selling isn't a desperate action on your part, giving them more confidence in the purchase and making them more likely to pay a higher price.
Getting a professional such as an experienced business broker can help make sure you've accounted for everything.
2. Not Promoting Your Business Yourself
Even if you hire a broker or marketing team, you should continue to promote the business yourself.
Why? The answer is simple. You know your business better than anyone else. You also, at least at some point, probably had a passion for it. This makes you the best person to instill interest in others and find the right person to buy. Plus, the more people on the hunt, the better your chances of selling success get.
3. Taking the First Offer
When selling a business, it's easy to get overly excited and snag the first offer that comes your way. This is a common mistake.
Chances are that the first offer you get won't be the best or highest paying one. Even if it is, there's no harm in waiting until you have a few offers on the table to evaluate which one suits your needs best. Having more offers can also allow for competitive pricing.
Waiting for the right person can also mean waiting for someone who will do a good job managing the future of your business. This is important if you don't want to see your hard work fail in a year's time.
4. Selling the Wrong Price Tag
It's also common when selling a small business to ask for too much or too little. If the price is too high, it might not sell. If the price is too low, you risk losing out on making a huge profit.
It's not a bad suggestion to get a valuation from a third-party professional.
After all, small businesses are usually worth anywhere from three to six times their yearly cash flow.
Avoid These Mistakes When Selling a Business
Whether you are selling a business now or might be in the future, make sure that you avoid making these four mistakes at all costs. If you play your cards right, you could end up making more than you dreamed.
If you found this article helpful, check out our blog regularly for more financial tips. Visit the Finance, Sales, and Startup sections of the Bootstrap Business Blog to learn more about smartly selling a business successfully and exit error-free.
