If you're looking at selling your business there are several traps sellers frequently fall into. Selling a business is complex, and there can be many variables that arise during the course of the sale. Here are just a few of the common mistakes to avoid when you are selling your business.
1) Going to market with the wrong sales price
You only get one chance to make a first impression. There are always plenty of qualified cashed-up buyers looking to purchase quality businesses. The opportunity to attract the attention of these buyers only comes once. It is really important that the first impression you create is of a well-priced business which offers the buyers a great opportunity to be part of something that they can improve and enjoy into the future.
Sellers often ask, "can we price the business high and then simply reduce it as time goes on?". The answer is, of course, yes, but in the process, you lose the opportunity to create that great first impression you were looking for with the buyers who may have been very interested.
2) Engaging with the first buyer who comes along
If you have a solid business there will be many potential buyers who will look at it. Don't be too eager to enter into the first offer or contract which presents itself. Quite often business owners get very excited at the prospect of a sale and their excitement costs them dearly. In order to ensure you achieve the best price for your business, it is important to make sure you market the business for sufficient time to a broad spectrum of potential buyers.
Quite often I hear of businesses selling in two weeks, or after just one inspection. Usually, all that this means is that the owner didn't fully explore any other potential offers.
A business sale should never be a race. It should be a calculated, well-organized procurement of every possible lead to ensure you achieve the best result.
3) Ensuring you hold the buyers hand throughout the process
If you think you're nervous when you're selling a business, think about the buyer. Whilst you are about to receive a great payday, buyers are commonly entering into large loans and taking on a huge amount of new information which can very easily lead to frustration, and quite often to nervousness and contracts collapsing.
It is very important to communicate with buyers regularly throughout the process. Quite often I will call a buyer and say "I just thought I'd touch base to see how everything is progressing and to see if there's anything at all you need advice or assistance with". 9 times out of ten the buyers are fine but it is critical that they are looked after throughout the process.
It is just as important to stay in touch after the sales has completed. Buyers really appreciate your ongoing support and in what can be a huge life change for them it is really important to let them know you are still ready to assist with potential questions or problems