Business sales or acquisitions can be challenging. Making the right choices during a business transaction can be difficult when you’re simultaneously juggling day to day business operations. To help you navigate this undertaking, I have put together this list of advice for avoiding common mistakes I’ve seen as a business broker.
1. Mixing business with your personal life
After years of building a business, it can be difficult to separate yourself – and your emotions – from your business. When selling your business, remember to keep in mind that this is a business decision, not an emotional decision. As a business broker with over 30 years of experience, I realize the investment that’s put into a business. I always look for potential buyers who can continue the success of your business. But remember, there is a new, exciting chapter of your life waiting after you sell your business.
2. Plan your exit strategy
When your business is booming, it’s the most exciting time to be a business owner. Coincidentally, this is also the best time to sell your business. Success can make you reluctant to leave, but it also allows for the greatest pool of qualified prospective buyers and ultimately the best sale price. When considering your exit strategy, keep this in mind.
3. Keep focused during a sale
A business sale transaction is time consuming and requires focus. If that focus is lost, or there is a lapse in momentum, it can be easy to fall into a situation that results in a lengthy sale process or revenue loss. It is wise to work with a business broker who can direct the process, saving you time and costly mishaps.
4. Letting a good opportunity pass you by
Market conditions, the conditions of your business, and so many other factors influence the value of your business. Timing is everything in using these factors to your advantage. A missed opportune moment may never come again, so don’t let them get away.
5. Never forget about customers
During a business transaction, it is crucial never to lose sight of the customer. They should be at the center of your business decisions. By organizing your company around your customer, you create value to the business. A successful, customer centric organization appeals to buyers.
6. Know your goals
Do you want a change of pace? Do you want to retire? Are you looking to preserve your business legacy? Do you want to cash out and invest? If you don’t know where you want to go, it’s hard to find the way to your destination. When considering a business sale, identify your goals for the transaction so that you can find your way.
7. It is a team effort
It takes a team to sell a business. Selling your business is exciting and emotions can run high. It’s important to build a strong team that can provide you with perspective and constructive feedback. An experienced business broker is a vital part of your team who can provide insight and guidance. A strong team will yield maximum results in a business transaction.
8. Knowing when the deal is done
There’s a light at the end of the tunnel. But sometimes you can’t quite tell if you are out of the tunnel. Things can go wrong at any stage in a business transaction. Remember: the deal isn’t final till all the i’s are dotted and the t’s are crossed.
9. Rely on strategy and not hope
The best results in a business transaction do not come from “hoping for the best.” The best results come from having a thoughtful business strategy. Having a framework, and a team to review and refine that framework, will result in an easy transaction. An experienced business broker is one of the best players to have on your team when it comes to strategy.