The 10 Biggest Mistakes Business Owners Make When It Comes To Selling Their Business
Currently we are conducting seminars around Hawke's Bay helping owners understand what it takes to be sales ready. At each seminar we ask attendees to complete a survey which provides them with an insight into how ready their own business is.
For many it has been quite an eye-opener.
With that in mind, we thought this list might interest you if you have plans to sell your business in the next 2-5 years. And keep an eye out for our next free seminar. If you want more details about that, simply go to our contact page to get in touch.
1. Unrealistic Valuation
Their emotional attachment leads to rose tinted glasses
2. Waiting too long before selling
Timing…sell when business is performing strongly
3. Thinking their business will sell straight away
Be prepared for a long sale process, possibly years!
4. Owner's role is indispensable to the business
Directly impacts value, buyers are not interested in buying your job
5. Not seeking professional advice
Business advice/ accounting/ legal/ financial
6. Not preparing the business for sale
Systems /staff /reports - look at business objectively from the buyers perspective
7. ‘Stealing’ from yourself
Not declaring cash in the books, you need to maximise profitability
8. Not normalising accounts, having lots of addbacks
Using the business for personal benefit or reducing personal tax
9. Buyers do not pay for ‘opportunity’
Value is based on history. Why did the current owner not take the ‘opportunity’?
10. Thinking they can sell it themselves
False economy, brokers brings multiple buyers and ultimately the best price