There are no Mulligans when selling your business.  Avoiding these “sins” will give you a good shot at executing a successful transaction.

(1) Not Understanding the Value of Your Business

Business valuation is not an exact science, but it remains an essential first step.  A good business valuation will help you understand what your business looks like from the perspective of a buyer and most importantly what an outsider is likely to pay for your business.

(2) Not Being Prepared to Survive Due Diligence

Business owners know their business like the back of their hand.   Buyers don’t.   Sellers “know” that everything is OK with their business.  Sellers want you to prove it.   Your legal ducks need to be lined up in a neat row.

(3) Not Assembling the Right Deal Team

We encounter some business owners who think they can sell the business themselves.   We have yet to find a single former business owner who did this successfully.   Picking the right broker/investment banker/transaction intermediary is critical.

(4) Failure to Choose the Right Buyer

Assuming a properly conducted sales process, several buyers will present offers.   You will need to consider these offers and pick the buyer that you want to continue negotiating with.   Buyers will insist on an exclusivity period during which they have a period of time – typically 60 to 90 days – to reach a final agreement.  Price is of course an important factor, but rarely the only one.

(5) “I’ll Leave the Fine Print to the Lawyers”

The devil is in the details.  Having an experienced deal lawyer on your team is absolutely critical, but it is not enough.  The seller and her business and tax advisors must be involved in structuring the deal because the fine print will have large financial consequences.

This blog is an excerpt from my article featured in the August 2016 issue of Business2Business magazine.