If you have decided that the time has come to sell your business, it is important to approach the process carefully.
After all, it is likely that you’ve spent a lot of years of passion and hard work building your business to the state it is at today.
The last thing you want to do is undo all of your efforts by undervaluing your business or making a mistake during the sale process.
With that in mind, read on to discover some of the most common mistakes business owners make when selling their company so that you can avoid making them.
Selling to the wrong person
You have probably heard the saying that money is not everything, and this is definitely the case when it comes to selling a business.
Naturally, you are going to want to generate as much profit as possible from the sale. However, you need to think about what cost this comes at.
If the buyer is likely to cut a lot of jobs, is this something that you are going to be okay with? You need to consider all aspects of the sale, not just the money that you were going to make from it.
Incorrect valuation method
There is no denying that valuing any type of company is difficult. There are a number of different factors that must be considered when determining how much your business is worth.
The nature of your company plays a role, for example, if you sell IFA business practice, your valuation is going to be different from someone who is selling a construction firm. After all, the market is entirely different, as is the growth potential, which is also taken into account.
Aside from this, the sort of profits the potential buyer can take away every year will b considered, as well as how much it would cost to set up a similar business from scratch.
Failing to prequalify buyers
You will save yourself a lot of hassle going forward if you pre-qualify anyone that is interested in buying your business. You may be worried about this because you may fear that it will scare off interested parties.
Nevertheless, the pre-qualification stage can actually attract the more genuine and interested buyers because it means documents will be signed that keep both parties safe.
No exit plan
Last but not least, when preparing to sell your company it is vital that you have some sort of exit plan. In fact, there are a lot of business advisors that will recommend that, as soon as you begin your venture, you should prepare a comprehensive exit strategy.
This will help you to easily deal with a number of different things that will come your way during the sale, including the aftermath of the sale on both a professional and personal level, as well as how to prepare for the transition and how to value your business.
Avoid the four mistakes that have been mentioned above and you will give yourself a much better chance of everything running smoothly when selling your business.