Proper planning can mean thousands of dollars in your pocket
Every day business owners make serious mistakes when selling their business and leave thousands of dollars on the table. These mistakes are often easily avoidable. As entrepreneurs, they had once dreamed of owning their own business and building it to success—to reap the rewards in the form of a successful business sale. Sounds like a great plan! But making the sale is not as easy as it may appear.
As an entrepreneur, I have built and sold several businesses including a software company. Now, as business broker professional, I use that experience and knowledge to help other business owners achieve this same success.
Here are my tips to help you avoid business sale pitfalls and lost money.
Plan Ahead. Don’t wait Too Long to Sell:
Waiting too long, or not planning in advance, can cause many business owners to miss their window of opportunity. It takes an average of one to three years to sell a small business. Therefore, planning is key to any successful business sale. By keeping updated records, a detailed business history and sales portfolio on hand at all times, it will make your planning pay off.
Find the Right Person to Represent Your Business
Finding the right business broker to help you sell your business is crucial to your success. Often business owners go with the first person they meet just to list their business and get the process going. This can cost you time and money in the long run. Within a few months, you may see no results and have to go on the search all over again. Taking time to interview many brokers and looking at a realistic outcome of what is expected will get you going in the right direction.
Do not engage with a business broker who will simply tell you want you want to hear. They tend to over-value your business so you sign the agreement with them. Precious time will go buy and ultimately you’ll need to reduce the asking price. It’s best to engage with a business broker who has the experience and will be honest about what they see in the marketplace. Over pricing a business will simply cost you money and time. Business that are priced “ right” sell within a reasonable period of time. Best practice is to sign up with a business broker with a realistic approach and prospective buyer candidates will be presented to you within the first few months.