1. Not having organized financial records.
Most if not all buyers will request to review the last three years profit and loss statements/balance sheets and tax returns – at a minimum. In addition, if the buyer is looking for bank financing, the bank will also request the same information.
2. Selling when your revenue is in a downtrend.
A growing business is the most attractive business to a buyer. When selling your business, you want to sell from a position of strength not weakness, so don’t wait until you have no choice but to sell.
3. Listing your business too high.
Most businesses are saleable if priced and structured properly. Sellers should understand that only the marketplace could determine at what price a business will sell.
4. Not notifying your team of advisors of a possible sale.
Time is of the essence on any business sale transaction. A buyer will want up-to-date financial information (see #1). If you use an accountant or bookkeeping firm, you can work with them on making current information available. If you are using an attorney, you might ask if their schedule will allow them to participate in the closing on a very short notice and you don’t want to wait until the attorney can make time to prepare or review the documents.
5. You don’t use a business broker.
Business brokers are professionals that will facilitate the successful sale of your business. You want to make sure you hire an honest and experienced business broker. A business broker that will help you decide how to price your business to sell and how to structure the sale. Whether it be here in Iowa or anywhere across the US, partnering with a business broker to sell a business will get you the most bang for your buck and will make the process easier for you.