Many a time, small business owners find themselves contemplating selling their business owing to unforeseen contingencies. Rarely a small business is started with the aim of selling it; profit is the ultimate goal of every new business and if the business is up for sale, it mostly means something is wrong. Logically, buyers will always be wary of sellers. So it is up to the sellers as to how they choose to proceed with selling their business. And understandably, you may not be great at selling your small business to the desired effect. Here are a few business mistakes to avoid before embarking on the road to a successful sale of the business.
In business, you strategize every step and stage of your business model and process, then why not your exit strategy? Great planning can help reduce the roadblocks in your business for sale. On average, it takes at least a good 2 years of planning and preparation before even listing the business for selling. You need to be prepared for the process of ‘Due Diligence’, wherein your prospective buyer will conduct an audit on your business records and figures to make an informed decision. Also crucial are the confidentiality agreements with the buyers and brokers in case of hired brokerage services to maintain the normalcy of your business environment with respect to employees, sales, and customer relations. This is to avoid any panic and anxiety from the knowledge that the employer is in the process of selling the company. The preparation time can also be utilized to bridge any gaps and frictions that may not look good at the time of sale. After all, you would want your prospective buyer to view your “business for sale” tag in a good light implying a promise of future profits.
Business owners exploring sales opportunities to exit their business gracefully must understand the difference between possessing expert knowledge about your own business and knowledge about selling the same. These are two different domains and hence, it is wiser to involve the experts in the field to handle your business undertaking more efficiently. You may feel confident of profitably accomplishing the sale yourself, but when you get to the act, you realize the alarming complexity of the work and effort that goes into accomplishing a successful sale. While it may alarm you to no end, it’s comparatively uncomplicated for experts who co-ordinate such businesses on a daily basis. So, accept the fact that you may need support in materializing your goal and unhesitatingly reach out to the best firms after considerable research. Even if you have a broker, it might be a huge mistake to alienate yourself completely from the sales proceedings after entrusting it to a broker. You are an integral part of the sales pitch, so ideally you too have to be prepared and be on top of all the activities to project a more engaging and convincing offer before the buyers.
Small business owners usually, end up under or over valuating their business for sale. Undervaluation occurs due to insufficient market knowledge and incompetence to defend your business price tag. Overvaluation is a result of the overconfidence of the seller without proper consultations. Either event can raise red flags in the eyes of the prospective buyers. As buyers are already vigilant about the reason for sale, it does not add to the overall allure of a sales pitch when your price tag does not match your existing business and also market rates of similar businesses for sale. You need to conduct a thorough valuation study with respect to how your company is doing at the time of listing and also past records and the valuation of similar businesses from your domain. The price tag you attach to your sales pitch should be reflective of your careful research and honest approach. Chances are, buyers will be more attracted to your business purely out of consideration for your factual projections. Hence, beware of poor valuation consequences.
As difficult as it may sound, the decision of selling your small business must be taken at the right time. As an owner, you will agree that you foresee your business prospects in the coming years with respect to the existing business scenario. If your instinct says you have exhausted all avenues of elevating the dipping growth curve, you know it is time to take a serious decision. Do not hold onto a failing prospect until it’s too late to gain any benefit from it. There are many reasons a small business owner may decide to sell the business, ranging from insufficient resources to health reasons. So, whatever the reason, make sure you make the decision and prepare for the eventual transfer of ownership gracefully and profitably if possible before it becomes a lost cause!
Decisions are meant to be taken with considerable thought. Selling your small business is a crucial decision and the worst way to project yourself and your business is by seeming desperate. Appropriating figures to look good on record, lack of a good sales strategy, hiring the first broker or selling to the first buyer without considering other options are all a result of frustrations arising from a desperate state of mind and situation. Hence, remind yourself to stay calm and have patience with the process, but never let your frustrations reflect in your decisions. To avoid all the said mistakes, you can leverage the service of Simplified Marketplace. You can always opt for our online platform to sell your business with the aid of an entire team of professionals from all the relevant fields like sales, finance, and legal consultants. Our expert team of consultants is just a click away at www.simplifiedmarketplace.com