The world of business transactions is a complex place, with lots of details to keep track of. When looking to sell your business for maximum value and with as little hassle as possible, there are dozens of elements you’ll need to stay on top of and complete.
Just as importantly in many situations, though, is knowing what not to do during this process. An error of commission can be just as huge as an error of omission, and at Utah Business Consultants, we’re here to assist you with both ends of the exit planning spectrum. What are some of the things you should be avoiding during the process of selling your business?
Probably the largest mistake made while selling a business, especially among first-timers, is going in with too lofty a set of expectations. It’s natural to overvalue our businesses, and just as natural to read certain market indicators as pure positives even when reality might indicate otherwise.
Those successful in this arena learn to curb those instincts, though. Make sure your pre-sale evaluation is as thorough and objective as possible, and include a third party if necessary. Try to enter the process with as realistic expectations as possible.
Both sides of the coin can be bad here. Overvaluing your business will lead to issues with receiving interest in your sale, plus can cause banks lending funds to buyers to balk at the size of the appreciation. Undervaluing might leave potentially serious money on the table, plus might make investors wary that something is wrong behind the scenes – otherwise, why would such a business be valued so low?
Not Enough Prep
If your exit planning process doesn’t begin at least six months to a year before you’re actually planning to divest, you aren’t taking enough prep time. Many people start years in advance. It’s often surprising to first-time sellers just how detailed a process this is, so get going much earlier than you think you need to.
Often times, every element of a sale is just right except the timing. The market might not be exactly right, or there might be a way to strengthen your position a year down the line. Discuss these issues with your sale team and be sure you’re making the right call timing-wise.
Finally, a very common pitfall is simply assuming you can do too much of this process yourself. So few business owners truly have the combination of time and knowledge needed to sell a business without any mistakes, and this is exactly what the experts at Utah Business Consultants are here for. We’ll help you with everything from valuation to client research, and our brokers will be with you at every step to ensure you’re getting the maximum value for your business.