Selling your business is no easy feat. And for first-time business sellers, it can be an overwhelming feeling to be standing at the starting line, not quite understanding how the race is run. So, this month we wanted to shed some light on the top three mistakes business owners make before selling their business. Unfortunately, many first-time sellers make at least one of the following three mistakes. But the good news is, you don’t have to follow suit!
So, what are the three mistakes business owners make?
Mistake #1: Under-Preparation: Setting Yourself Up for Failure
One of the most significant mistakes business owners make before selling their business is being under-prepared. Selling a business requires meticulous planning, assessment of financials, and understanding the market. Unfortunately, some owners underestimate the time and effort involved in this process, leading to inadequate preparations. This can result in unrealistic expectations, missed opportunities and unnecessary stress.
To avoid this mistake, start preparing for the sale well in advance. Begin by assessing your business’s financial situation, identifying potential areas for improvement, and addressing any existing legal or operational issues. Get your finances and operations in order and tidy up your processes. Engage the services of professionals such as accountants, lawyers, and business brokers (like us!) to ensure that you have a realistic understanding of your business’s worth and can present it effectively to potential buyers when the time is right.
Mistake #2: Emotional Decision-making: Detach to Enhance Profits
Emotions can cloud judgment and impair decision-making during the business sale process. Many business owners have devoted years of their lives to building their businesses, which can make it challenging to detach emotionally. You know the time, money and sacrifice that you’ve poured into your business, and on an emotional level – you want to be remunerated fairly for all of your hard work. However, emotional decisions based on sentimentality or personal attachment can often lead to poor outcomes.
When selling your business, it is crucial to remain objective and logical. Ensure that your decisions are based on facts, figures, and market conditions rather than on sentimental attachment. This may involve seeking advice from professionals or establishing a support network of experienced individuals who can provide an unbiased perspective. A business that is priced too high won’t sell. And spending too long on the market without selling may raise concerns among potential buyers. Your business broker acts as your impartial third party in this situation. Using their years of experience in situations just like yours, they will advise on the best processes to ensure your sale is successful. Not sure how it all works? Contact us for an obligation-free chat.
Mistake #3: Not Using Expert Help: The Risks and Benefits
Another significant mistake made by business owners is attempting to sell their business without the guidance of seasoned business brokers. While selling without a broker may seem like a cost-saving measure, it often leads to missed opportunities, extended selling periods, and potentially undervalued sales. Think of it this way, selling with an experienced broker may lead to a significantly high sale price, or perhaps a lot of time, energy and stress saved. How much are those benefits worth to you?
Working with an experienced business broker who specialises in your industry can provide several benefits. They possess valuable market knowledge, an extensive network of potential buyers, and negotiation skills that can ensure a more successful sale. A broker will handle the entire process, from marketing your business confidentially to identifying qualified buyers, negotiating terms, and managing paperwork. This frees up your time to focus on continuing to run the business and guarantees a smoother process overall.
When it comes to selling a business, business owners can’t afford to make costly mistakes. Avoiding the pitfalls of being under-prepared, making emotional decisions, and neglecting the expertise of business brokers can significantly impact the success and profitability of your sale. If you’re thinking about selling your business within the next 12-24 months, contact the team at Core Business Brokers today, at (02) 9413 2977. Alternatively, you can email [email protected], [email protected] or [email protected] to learn more about the process, and how your business sale journey may unfold.