Ten easy ways to mess up selling your business.
Ten simple ways to mess up selling your business.
Easy ways to gamble and lose your most valuable asset.
1 Failing to start today, planning and working towards an orderly exit.
The choices are work until you drop, go out on a high, sell the business you have built for a pitiful price or watch the creditors pick the carcass of your company clean. There's only one right answer. Which would you chose?
2 Not knowing the best route, to take, to maximise your business' value.
Management buying, straight sale, floatation, management buy in, liquidation of assets. These are all options but knowing which is best, for you, can dramatically increase your return and change the dynamic of the sale.
3 Not preparing the business for sale before you market it.
It's the little things that count; first impressions, cleaning up the accounts, increasing profitability, human resources and much more that needs to be done if you want the best price for your business. To succeed you need to start now.
4 Doing a DIY job of selling up.
Selling a business is a big deal. This isn't the time to skimp on using professional advisors but the trick is knowing how to find the right ones, at the right price, who will work for you and open doors to reveal wealthy buyers that you don't even know exist.
5 Failing to value your business properly.
If you don't know what your business is worth you will sell it cheap or price it unrealistically frightening off potential buyers and without a proper valuation you won't be able to negotiate a good deal.
6 Selling to the wrong buyer.
In the motor trade they are called tyre kickers; customers who come onto the forecourt and kick car tyres with no intention of buying. It's easy to waste time with them while letting the real buyers, who have the desire and the money to spend, get away.
7 Not negotiating effectively to increase the value of the deal.
In business you don't get what you deserve, you get what you negotiate. Selling a business has to be negotiated carefully if you want the best deal.
8 Letting the buyers accountants screw down the price.
After the deal is done, the buyer's accountants will crawl over your books and every other area of the business, looking for excuses to drive down the price. Don't panic, there are ways you can keep them on a leash.
9 Forgetting the day job.
Selling a business is traumatic and time consuming. It's easy to let the day by day running of your business slip while you are distracted and there are other risks. Forgetting the day job can even break the deal you are trying to do.
10 Not understanding the legal jargon.
Lawyers speak in a strange tongue filled with snares and traps that will catch you out if you are unwary and cost you a lot of money. Lawyers are law men who shoot to kill using contracts filled with clauses and conditions. Ignore the small print at your peril.
Despite all the dangers it is still possible to sell a business for a great price and ride into the sunset. To do it you need an Exit Strategy.