No Replacement for Experience
When it comes time to sell your business and sign on the dotted line, you only have one opportunity to get it right. Business owners have often made critical mistakes while attempting to sell their businesses. This scenario can often occur when an owner trusts a friend or relative to help navigate the process. In some cases, business owners have even been known to try to broker their deals independently. Let’s look at some common errors during the process when experienced professionals were not brought in to assist.
Not Prioritizing Confidentiality
We cannot understate the importance of confidentiality. When business owners try to go it alone, they often share valuable information with the wrong people, such as competitors. Or accidentally alert employees, suppliers, and customers that the business is up for sale. When confidentiality is breached, unexpected and unfortunate consequences can result, such as employees looking for new work or customers switching to work with different businesses. These scenarios can devalue the business or even interfere with a proper sale.
Mistakes in Financial Information
If the party assisting you in selling your business lacks experience, he or she may accidentally omit to prepare critical paperwork. This could lead to lower offers and less interest from prospective buyers. Additionally, if the financial records are not adequately audited, it could negatively impact the numbers.
Failing to Involve Key Parties
Another error caused by inexperience is neglecting to bring key parties into the deal. For example, when a business owner is guided by a layperson or trying to handle everything on his or her own, important people, such as the CFO, might accidentally not be brought into the due diligence process. While an error like this might not necessarily kill the deal, it could lead to delays and complications.
The bottom line is that it is time to rely upon trustworthy professionals regarding a significant transaction like selling your business. A long list of protocols and steps leads to a deal going smoothly. Experienced business brokers and M&A advisors will ensure that all the best practices are followed and that you come ahead in the end.
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