A day may come when a business owner wants to sell their venture. They are ready to move on to new things in life. When this day arrives, they may struggle to sell the business. Certain mistakes are commonly made by business owners in this situation. Knowing what these mistakes are and how to avoid them makes the sales process easier in every way.
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Plan for the Future
You may not have difficulty selling your business. It’s what comes next that is the concern. Before meeting with a business broker, take time to figure out what life will look like once the business is sold.
Entrepreneurs often don’t realize the amount of time they invest in their business on a daily or weekly basis. When they have free time, they don’t know how to fill it. They’ve let their hobbies go and have few close friends.
To have a successful sale, the business owner must know what their plans are for the future. Otherwise, they may sit around regretting the sale and find they are bored and unhappy. This can be avoided by planning for the future before moving forward with the sales process.
A person cannot decide to sell their business one day and put it on the market the next. Begin the process of selling by requesting a business valuation. This valuation will allow the business owner to see how much they can expect to get for their hard work.
If changes need to be made to the business, they can be implemented prior to putting the business up for sale. In addition, preparing for a sale early allows the owner to get their financial records in order and gather all paperwork needed to complete a sale.
A business owner should try to avoid selling their organization when sales are down. Doing so puts them in a weak position during negotiations and can lead to the sale price of the business dropping considerably.
If sales are down, take time to evaluate the business and make changes to bring it back up. Potential buyers want to invest in a business that is growing. If it isn’t possible to grow the business, try to hold off on the sale until it stabilizes.
Evaluate financial statements from the previous 12 months to get an idea of where the business is currently at. Experts refer to this as trailing 12 months, and it is of great benefit in determining whether the company is growing or faltering. Potential buyers want this information, so the current owner must know where they stand and where changes need to be made prior to putting the business up for sale.
Don’t Accept the First Offer
A business owner might be tempted to accept the first offer that is made on the venture. However, it’s best to allow several buyers to put in offers. Doing so increases the selling price while leading to a sense of urgency when it comes to finalizing the deal once a buyer is selected.
When multiple bids have come in, look at factors beyond the bid price. A business owner should also consider the purchase terms, how the business will be used by the new owner and more. A business broker can be of help in evaluating the bids to find the one that is most favorable to the seller and handle negotiations on their behalf.
Selling a business takes time, and it can be an emotional process. Work with a business broker or turn to other resources when carrying out this step. A successful sale will leave the owner with a sense of satisfaction and a large sum of money, which are always good things. The right professionals can help this happen.
Alan Roodey is a professional Author and contributor to many sites. He loves to write on various topics.