3 Mistakes in Selling Businesses and How to Avoid Them

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3 Mistakes in Selling Businesses and How to Avoid Them

In 2000, the largest acquisition ever was made, when Vodafone bought Mannesmann AG of Germany for $183 billion. While your business might not go for that much, that doesn’t mean you can’t profit nicely from it. Of course, even if you have a successful business, that doesn’t mean you can easily sell your company for top dollar.

People make a lot of mistakes in selling businesses. These mistakes can cost them a lot of money and they might not even be able to sell their business at all. Luckily for you, we’re here to help make sure that you know what these mistakes are and avoid them.

So keep on reading and we will take you through everything you will want to know. 

1. Not Being Prepared

When you go to sell your company, there are several things that you’ll need to prepare before you put the business up on the market. Every business is going to benefit from some TLC and clean up before it goes up for sale.

It’s the same thing when it comes to selling a home or a car.

Before you sell your business, you should consider staffing changes, pending litigation, organization of records and books, and excessive or questionable tax deductions.

Some of these things can’t be fixed so easily and you might want to give yourself time to prepare. 

2. Not Understanding Where A Company’s True Value Is

Like anything else that is for sale, a company is worth as much as someone is willing to pay for it. If you just use a simple EBITDA (earnings before interest, taxes, depreciation, and amortization) calculation, you could end up undervaluing your company.

The seller needs to show that the future is bright for the buyer. They should understand the value that they could be getting when they make the purchase.

3. Not Taking Advantage of Professional Help

You shouldn’t assume that you can easily sell your business on your own. Most people wouldn’t sell their homes without a real estate agent and the same thing is true when it comes to selling a business. 

If you don’t hire a business broker then you could end up getting a lot less money than you should in the end. Being great at running a company is not the same as being great at selling a company, after all.

A business broker can help you find the most reliable buyers and negotiate the best price for you.

The Importance of Knowing Different Mistakes in Selling Businesses and How to Avoid Them

Hopefully, after reading the above article, you now have a better idea of the different mistakes in selling businesses and how to avoid them. As we can see, it’s important that you don’t rush into the process and you work with a professional to get the best price.

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