Biggest mistakes when selling a business
Selling a business is an art in itself. And with almost 90 years in operation, Core Business Brokers knows the Sydney business market inside out. Our experience and knowledge of the industry mean we’ve seen it all. And since we can all learn from the mistakes of others, we thought we’d share some of the biggest mistakes when selling a business with you today.
From advertising to negotiating, navigating through the legal paperwork, understanding the fine print of each situation and knowing what to expect around every corner. Selling a business can be a daunting time for business owners. We hope that you won’t make the same mistakes when it comes time to sell your business.
Not planning for the sale
Being underprepared for your business sale is a common mistake that we see here at Core Business Brokers. It’s important to organise your financial documents, streamline your operations and make your business both neat & tidy, and attractive to prospective buyers.
Alongside this, preparing your business for sale can mean increasing profitability so it looks more attractive to potential buyers. Core Business Brokers can assist you in this preparation by assessing the business before it goes to market.
Leading with your heart and not your head
We get it. Selling a business that you’ve created or grown over many years can be an emotional experience. But you must view this process as strategically and logically as possible. This is where employing a Business Broker comes in handy. Having an experienced Business Broker on your side can help you navigate through the emotions and see things from a clear perspective.
Expecting an unrealistic sale price
When you’ve poured time and money ( not to mention your heart and soul) into your business over an extended period, it’s only natural that you’ll want to recoup some of these funds when it comes to the sale price. However, this isn’t always possible. Many factors contribute to your sale price, such as market conditions, competition, profitability, debt and more. Our team will appraise your business before listing, and present a realistic sale price that we believe you can achieve. Many businesses that don’t sell successfully, are due to the current owner expecting an unrealistic sale price.
Selling at rock bottom
When a business hits rock bottom, the first thought for many business owners is to jump ship. But this can be the worst time to sell your business. An underperforming business will sell for much less than a profitable one. So, with the correct planning in place (see point #1), you can boost profitability, and sell your business at peak performance level, achieving a much healthier sale price.
Having no exit strategy or succession plan in place
Selling your business is just the first step of this 2 part series. Have you identified what you’re going to do next? It’s all well and good to say “I’ll just take a break”, but it’s important to plan for your future. Not only does an exit strategy outline how your business will successfully transition to new ownership, but it also identifies your next steps.
Making sure you’re in a good financial position for the future, as well as guiding you to your next venture – whether that be for business or pleasure. And remember, when you sell your business you will be expected to sign a restrictive non-compete agreement. This effectively excludes you from re-entering the same or similar industry for a period of time.
Adopting a DIY approach and losing time, money and opportunities
Business owners are often resourceful and creative people. Throughout their business owner journey, they’ve most likely worn many hats and performed many roles. But just because you had to be resourceful, doesn’t mean you need to sell your business alone. Adopting a DIY approach to your business sale may work, but whether it’s in your best interests is another story.
Hiring an experienced Business Broker to guide you through the process can alleviate stress, give you time back and negotiate a better sale price on your behalf. In other words, whatever fees you pay your business broker you would normally make back with their help. Plus, a business broker is able to negotiate on your behalf with multiple qualified buyers, in turn saving you from emotional stress along the way.
If you’re considering selling your business, contact the team Core Business Brokers, Sydney. Our experienced team of Business Brokers know the business sale process like the back of their hands and are here to help you on your sale journey. Contact us to book your initial, obligation-free discussion today here, or give us a call at (02) 9413 2977. Alternatively, email [email protected] or [email protected] to discuss your options.
