Mistakes Entrepreneurs Make When Trying to Sell Business
It is not easy to sell business. There is a lot that goes into the process and if you are not careful, you might end up selling at a loss or not finding anybody to buy your firm. To avoid such outcomes, you need to start by hiring a good business broker San Diego. In addition to that, if you plan to sell business, it is critical that you educate yourself on how the whole thing works. In this post, we will focus mainly on the top mistakes business owners make when selling their companies.
Overpricing the business
This is the top mistake that business owners make. It is a common mistake among the people who want to sell business for the first time. A fact you should take note of is if you overprice your business, finding a buyer will be difficult. To avoid this mistake, work hand in hand with a good business valuation expert. He will help value your business and advice you on better ways to increase its value.
Thinking the term sheet is a binding offer
As you sell business, a prospective buyer will give you a non-binding letter with intent or a term sheet. After signing this document, you agree to give the prospective buyer the exclusives about your business. This means you will tell him facts you would not feature in an advert, the kind that may drive the value of your business down. Therefore, whenever you get an offer, do not be in a hurry to cash the check as there is still a lot that needs to be done before you close the deal.
Not creating competition for the company
If you have sold a house before, then you know you only get the best deal when there is a bidding war. The case is the same when you sell business. The key to getting many offers for your firm is to advertise the sale extensively. You need to enlist the help of business brokers. Their primary objective is to create the competitive tension for your company by getting more buyers to make offer.
Not striving to increase business value
To sell business at a profit, you need to work hard to increase its value. Work hard to clear business’ debts and increase your customer base. What this will do is increase the value of your company and you will be able to sell at a good price. Running luxuries through the business will not do you any good.
Hiding behind the lawyer
Another common mistake people make as they sell business is that of getting their attorneys to do their dirty work. Using your lawyers to market the business for you can at times cause buyers to grow cold feet. Instead of letting your lawyers do everything, take the wheel and use them just as consultants.
There are many more mistakes people make as they sell business. Hiring a reputable business broker San Diego will help you keep away from most of those negative practices. The broker has handled numerous deals before and he will advise you accordingly.