Selling a small business is a monumental event.
You’ve put a lot of work into this company and now you’re going to enjoy huge profits for that commitment.
Unfortunately, many small business owners don’t make it to the finish line before they suffer a major pitfall that ruins the large profits they were entitled to.
3 Common Mistakes That Occur When Selling a Small Business
Don’t let one of these three issues keep you from your well-deserved payout. Learn what they are and then do everything you can to avoid them before your company sells.
1. Choosing the Right Broker
Choosing the right broker to help sell your small business is too important a task to overemphasize. They’re similar to real estate agents in the role they play in the sale, and everyone knows how important a good agent is.
However, given their specialized field, a good broker is probably even more vital to the sale of your small business. Take your time with picking the best possible choice and, for clarification, choosing yourself is never the right choice (sorry).
2. Leaving Everything to Your Broker
At the same time, even the world’s best broker can’t market your business as well as you can. After all, who knows it better than you? Who has more passion for it?
Whenever your broker brings in a lead, you need to take immediate action. Give them the grand tour of your business, walk them through its operations, and answer any questions they might have.
Just because you have a small business broker doesn’t mean you can’t go out into the community or get online and do some marketing of your own, too. If you have a network, make sure they know that you intend to sell your small business.
3. Choosing a Buyer Based Solely on Money
If someone shows up with a bag full of money and they meet your asking price, by all means, go ahead and sell.
Unfortunately, that’s probably not going to happen.
Instead, you’ll need to think long and hard about the person you sell your company to. That’s because if the buyer is a bad businessperson, they’re probably going to have a hard time paying you back.
While there will definitely be paperwork that attests to their debt, that’s not going to help a whole lot if they don’t have any money.
You want to sell your small business to someone who doesn’t just have good credit and sound finances but also has a history of success running a company on their own.
Otherwise, best case scenario, you may end up buying back your business at a discount and having to start the entire process all over again.
Need Help During This Pivotal Time?
At Mooney Lyons, we appreciate that selling a small business is a huge milestone. We also have experience helping clients manage this important transaction. If you’d like our assistance with the financials involved with the sale, contact us today.