would you be guilty of any of these?

The 10 most common business seller mistakes

How to choose a business broker L&W Contact Phone Number
By Howard Weston
Managing Director
Lucas & Weston Ltd

It is said that learning from your mistakes is a great education. Better still, why not learn from the mistakes of others so you can avoid any costly oversights.

Having observed and taken part in hundreds of negotiations, here is a list of the ten most common mistakes I've seen sellers making.

Why are you selling?10. Why are you selling?
This will be one of the first questions you'll be asked. You'll need a good answer, as a buyer, and especially their advisers, will read much into it. Obvious reasons are retirement, health, capitalisation or a career change. If the buyer isn't comfortable with your reason, they will simply walk away.
the right time to sell9. The right TIme

Plan to sell when turnover and profits are at, or near, their best. It can be hard to justify a great price and do a deal when your turnover and profitability are in decline.

Plan your sale well in advance, making sure the foundation is set e.g. taking appropriate tax advice etc. Preparation, or lack thereof, can make all the significant difference to the amount of money deposited into your bank account.

There is also a definite timescale to closing a deal. Don't over ride the wave of consolidation or interest, in your sector or industry. Buyers can quickly go off the boil and move on if they feel they are not making progress or not getting accurate information efficiently. A good broker will know the right time and leverage it to your advantage.

bad advice8. Bad advice

Advice and opinions are all around. But always question the source and motivation behind it. A valuation from your mate down the pub who knows a bloke who sold for millions, might not be the most reliable indicator of your market position.

In the pressure cooker environment of a negotiation, it is easy to take short cuts or look for opinions which support your own thinking. But keep an open mind. You might need to be objective and collaborative if you want a deal to work.

over negotiating7. over negotiating

Many a deal has turned sour because one side feels cheated. You may have to work with the new owner for a period post sale. A skilful negotiator will know when to concede and when to stand firm. The key thing is to concentrate on the bigger picture, be collaborative. Win the big battles but don't be too concerned with winning every little point.

trying to sell yourself6. Trying to sell yourself

Selling a business is a complex and time-consuming process. It is very easy to underestimate the process and think you can do it all. You wouldn't be the first or last to take your eye off the ball while trying to sell, letting your business suffer – weakening your sales proposition.

Skilful buyers will automatically assume a position of advantage if they see you have no professional help, especially if they're equipped with an army of experts. Beware.

A seasoned broker who understands what it takes to make a deal happen can control the process for your best advantage from start to completion.

Not convinced? One of the best reasons to use a broker is to act as a buffer between you and the purchaser. There will be times when you'll want to adopt a tough negotiating position - a broker makes this possible without antagonising the buyer. Remember, you might have to work with a new owner during a handover.

Being inflexible5. Being inflexible

With all the different factors and personalities involved the need to take a pragmatic view is sometimes necessary. This shows empathy for the situation and a collaborative approach is always welcome and well received.

A negotiation is a give and take process. If you dig your heels in too early, or overplay your hand, you might just find you get left behind.

Ignoring feedback4. ignoring feedback

The market reacts very quickly to a good opportunity. Buyers will tell you the good, the bad and the ugly. Listen carefully, so you can, if need be, amend your offering, or make the changes that might secure a sale.

Poor Information3. poor information

The market reacts very quickly to a good opportunity. Buyers will tell you the good, the bad and the ugly. Listen carefully, so you can, if need be, amend your offering, or make the changes that might secure a sale.

It is very easy to massively underestimate the amount of time and effort it will take to get a positive result.

Intelligent owners realise this and do their research and take good advice early on. This gives them the chance to lay the ground work for a sale and get their house in order.

Time spent sorting the finances and red tape, boring as it is, will pay massive dividends throughout the process.

No preparation2. No preparation

Surprisingly, many business owners go to market without the first idea of what is involved and what they want to get out of the process.

Massively underestimating the amount of time and effort it will take to get a positive result is a common pitfall.

Intelligent owners realise this and do their research, taking good advice early on. This gives them the chance to lay the groundwork for a sale and get their house in order.

Time spent sorting the finances and red tape, boring as it is, will pay massive dividends throughout the process.

Price1. Price

The number one standout reason businesses don’t sell. The wrong price.

Get your value strategy and expectations in line right from the start. Get a credible valuation. In fact, get several. But make sure it’s robust and will stand up to scrutiny.

Price too high, and your business won’t get taken seriously and otherwise interested buyers, with perhaps a real motivation to buy, won’t bother to investigate or review.

Ultimately the value will be whatever a willing buyer and a willing seller can negotiate following a competitive sale process.

It’s great to have a firm idea of what you would like to achieve but keep it within reason. Don’t confuse the time you’ve put in over the years with value.

And finally wanting a million because you’ve always fancied being a millionaire won't get you very far if you can't substantiate it.

With sensible advice and a decent broker at the helm, you can easily navigate this storm and get a great deal.


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