According to a report by the National Association of Small Businesses, the top three challenges of running a business are economic uncertainty, the cost of health insurance benefits, and a decline in customer spending. However, when you’re no longer interested in coping with these challenges, then it may be time to sell your business.
When thinking about what to consider when selling a business, it’s critical to take the proper steps during the process to ensure you get every penny you deserve. Unfortunately, hasty decision-making leads many business owners to take shortcuts, which ultimately end up being mistakes. Here are just a few common mistakes to avoid when selling your business.
Neglecting marketing
Thinking that the presence your business has established within your community is enough to facilitate a sale in and of itself is a major mistake. Similarly, you shouldn’t expect any business brokers you’re working with to do all of the marketing and promotion for you either. When it comes down to it, nobody knows your business as well as you do, and while a business broker can certainly help to expand promotions, they ultimately start with the business owner themselves.
Not asking for the right price
Determining a business’s worth is a difficult but necessary component of making the sale. A business valuation is an attempt to estimate the company’s present value and the likelihood of future cash flows. There are three primary business valuation methods: asset-based approach, earning value approach, and market value approach. Discuss each of these valuation methods with your business broker to determine which is ideal for your business, and set the price accordingly. And contrary to popular belief, setting your price tag too high can be just as damaging as setting it too low. Likewise, if you aren’t willing to walk away if no one meets your asking price, then you’re never going to get the money you deserve for your life’s work.
Selling at the wrong time
Finally, selling too quickly or too slowly can result in major complications. Experts estimate the average time for selling a business to be between two and four years, which means long-term planning is absolutely essential. Working with a business broker can help you set and stick to a realistic timeline when selling your business. While you have to be willing to walk away if the time and price isn’t yet right, you can’t wait forever either. Hiring a business broker experienced with selling businesses for sale in your region can help you strike this balance.
Ultimately, avoiding these mistakes can help you get the payout you deserve for the business you’ve worked so hard to build. For more information about what to consider when selling a business in South Florida, contact Dolan Sales.