Are you attempting the feat of selling a business? This is not like the smaller goal of, let’s say, selling a mobile phone, your second-hand clothes, or even a car. Selling a business isn’t difficult but mistakes can be made.
Each day owners of small businesses around the world commit particular mistakes when trying to sell their enterprise. Learn from their blunders instead of committing these errors yourself.
We put together the 4 common mistakes to avoid when selling a business. Knowing and avoiding these tips can easily save you thousands of dollars.
Mistake #1: Failing to do promotion/marketing work when selling a business
Don’t fall into the trap of assuming a third-party will do the necessary promotional work for you when you’re trying to sell your business. Nobody knows your business more than you do.
Even the most expensive or most experienced broker will not be as passionate about your business as you are. You’d be very hard-pressed to find someone who knows the inner workings of your own establishment as much as you do. If being motivated about selling your own business were a contest, you’ll be sure to take home the first place trophy. And there’s no doubt about it.
This is not to say you don’t work with third parties to help sell your business. But don’t just sit back and wait for someone else to do the entire marketing job of selling your business for you. Share the post on your social media. Email and share the link of your business for sale to friends and colleagues.
Potential buyers would, of course, want to talk to the previous owner. Your level of experience and expertise about the company will be way ahead of anyone else. Communicating with the buyer directly will seal the deal and help you sell a business faster.
Mistake #2: Failing to plan ahead or refusing to sell at the right time
Trust us, you don’t want to wait too long or fail to plan the sale of your business. Selling a business is not as simple as selling some tangible item. There’s a window of opportunity that you just can’t miss.
Planning for the long term is crucial if you want to close the sale. You can’t just decide to sell a business on a whim. This means being meticulous about your records, providing interested buyers a comprehensive history of your company and keeping a portfolio about your business.
Your thorough planning won’t be put to waste if you’re looking to sell a business. Have all the records and your pitch ready so that when an interested buyer comes along, you don’t have to scurry and put together a sloppy mess of a proposal. No potential buyer will be impressed.
Mistake #3: Selling a business to an unfit buyer
Don’t just grab the first offer you see, unless there’s a concrete reason why you’re looking to sell a business fast. Remember that the first offer is probably not the best offer you can find.
Is someone offering to buy your business with no deposit yet wants a lengthy contract? This is a blatant red flag.
The proceeds of the business can go south after the new owner takes over. Without any money down, you could be left dealing with the failure of a business you thought you were retiring from.
Be wary of any potential buyers who lack experience in the business arena. The new owner may lack business experience, have a closed mind or be a poor leader. Ensure the details of the sale benefits you and meets your goals. This means knowing why you’re selling your business in the first place.
Mistake #4: Over or under pricing your business for sale
Now is not the time to be unrealistic. You don’t want to waste anyone’s time by setting the price too high or too low when trying selling a business.
Are you expecting too much for a business that’s not generating steady income? This is where meticulous planning plays a vital role. Consider factors such as your competitors, industry, customers and current market trends when pricing your business for sale.
Is your business stuck in a rut, not producing any income? Then you’re going to have to consider a going-out-of-business sale instead of quoting a steep price. What’s the advantage of a going-out-of-business sale? Immediate cash is one. Next, you get getting the business out of your hair. Let someone else, hopefully someone with more experience, handle your enterprise if it’s not making money.
If you’re feeling low and uninspired over a losing business, selling to the right buyer might be the solution. Sometimes cutting your losses and admitting defeat is the better course of action than milking a dried up cow.
But don’t act impulsively either. One common mistake of business-people is deciding to sell based on negative emotions. In effect, they end up pricing their business for sale too low. This is most true when owners decide to sell right after an unwelcome event happens, such as when illness hits or the tangible effects of financial woes. Timing is key.
Research, research and research when your goal is selling a business. Also, careful planning and acting out of logic instead of emotions will help you avoid these common mistakes when you put up a business for sale.
Like these tips? Check out our other marketing tips to help you close For Sale by Owner deals in Australia:
- Buy my house or my business in Australia! Learn how we can help
- The new breed of online agents versus commission-based agents
- Join the ranks of our happy customers and sell your business or house today
- 9 reasons to share your business or property for sale listing on Facebook
- MoveIn.Space: the free tool private landlords shouldn’t live without