When you are ready for an exit, the first professional you need to contact is a business broker San Diego. A business broker will have experience selling businesses that are similar to yours and will be able to navigate the challenges with ease. Even so, even with the best business broker by your side, it is important that you familiarize yourself with the common mistakes that business owners make. Let’s take a look at the main ones.
Lack of preparation is the number one cause of problems when selling a business. Prior to listing your business, you need to address several key aspects. If you are not being forced to sell, your business brokers San Diego will recommend you start by addressing the following:
- Organizing your financial documents
- Strive for sustainable profitability
- Fix all lease issues
- Take care of staffing problems
- Pay your debts and collect from debtors
Needless to say, getting ready to sell should start at least 2 years before you list your business. That way you will have sufficient time to work on the flaws of your business and improve its value.
Having created a business from the ground up can lead to overconfidence. Overconfidence will cause you to overprice your business or have unrealistic expectations on how fast your business should sell. The best way to avoid this mistake is to get an objective third-party business valuation. Your business broker San Diego will also help manage your expectations.
Unwillingness to leverage professionals
Selling a business might seem easy but it is not. There are dozens of complex challenges you have to deal with. The slightest mistake during marketing, negotiations or any other phase of the sale can lead to tremendous problems. Yes working with a business broker will cost you about 10% of your earnings but the service you get will earn you a lot more. You also need to leverage the expertise of lawyers, accountants and financial consultants.
Failing to pre-qualify buyers
Not every buyer that will inquire about your business is interested in buying it. Some people just want to learn your trade secrets. This is why prequalifying buyers is of utmost importance when selling a business. You need to know if the buyer has the means and the will to buy your business. Buyers must also sign nondisclosure agreements.
Failing to address transition problems
You have to keep the transition process in mind throughout the sale. During negotiations, discuss the transition with your buyer. Make sure there is a mutually acceptable arrangement.
Whether you are selling on your own or with the help of business brokers San Diego, familiarizing yourself with these mistakes will give you an upper hand. The rule of thumb, however, is to hire a dependable business broker early in the process.