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1. Neglecting the day-to-day running of their business when the business is for sale or an offer is in process with the reasoning that it will sell tomorrow. Remember, it is your business until the day it transfers. Run it like you normally do to the end.
2. Starting off with too high a price with the assumption the price can always be reduced and not offering realistic terms. Put yourself in the buyer’s shoes and think about what is needed in order for a buyer to move forward.
3. Assuming that confidentiality is a given. Confidentiality takes work to maintain. Work with a professional who understands this and will treat your business like it was there business.
4. Failing to plan ahead to sell / deciding to sell impulsively. Buyers are looking to buy on-going, cash flowing businesses with strong books and records. Prepare your business for sale.
5. Expecting that the buyers will only want to see last year’s P&L. Today’s buyers are much more sophisticated and educated. Buyers typically want to see trends over the last 3+ years and have a strong sense of what to expect going forward.
6. Negotiating with only one buyer at a time and letting any other potential buyers wait their turn. At the end of the day, the marketplace determines the value of a business. The more buyers who analyze the business, the higher the probability of seeing the best deal with the best terms. Working with a professional who knows how to manage this process is the key.
7. Having to reduce the price because the sellers want to retire and are not willing to stay with the acquirer for any length of time. Sellers should factor in a realistic time line for a transition period.
8. Not accepting that the structure of the deal is as important as the price. Remember – Price is a function of terms.
9. Trying to win every point of contention. Selling a business requires a give and take strategy. If a buyer is not comfortable, he or she will not move forward.
10. Dragging out the deal and not accepting that time is of the essence. Bottom line – Time is of the Essence!
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