Selling a business is not easy. Each deal has its challenges and nuances. That is why I love what I do, and know how valuable our service is at Transworld. Do you think you place an advertisement somewhere and the perfect buyer will call? I wish it was that simple.
While many entrepreneurs build a successful business through vision, excellent management skills and sheer hard work, most do not have a thorough understanding of the complexities and factors that are present in the deal structuring and business selling process. Plainly said, “It’s a jungle out there, and you need a professional tour guide”!
Here are more of the most common pitfalls when trying to sell your own
7) FAILURE TO PROPERLY STRUCTURE THE DEAL
When the seller has limited knowledge about the available alternatives for structuring the deal, he is at a definite disadvantage and probably a costly one. Items such as leverage buy-outs, leases, royalties, earn-outs, consulting agreements, non-compete contracts can add immeasurable value and security to both buyer and seller alike. At the same time, terms unfavorable to you could be a fatal mistake or make your head ache trying to figure out if
something is a scam.
8) FAILURE TO PREPARE FOR PROPER DUE DILIGENCE
Due diligence issues are very important to the selling process. It is imperative to be prepared and organized. You must be able to defend and substantiate
representations made during the selling process. We can guide you through the due diligence jungle. If your records are still in the shoebox, you will probably not get the deal done!
9) FAILURE TO MARKET THE SALE
If your business sale is being handled by a small brokerage or by you with limited advertising resources you will never find the best buyer at the highest selling price. With our large network, we are able to interview hundreds of buyers and get the best ready to purchase your business. Transworld’s approach creates a mini trading floor and auction like atmosphere that will
produce buyers that know the value of your business.
10) FAILURE TO SEEK THE RIGHT PROFESSIONAL ASSISTANCE AND CONSULTATION
There are legal, financial, marketing and other vital considerations that must be addressed in the selling process. Many decisions in the selling process should not be made without the advice of the right professionals. The wrong professional can lead you to make bad decisions. You need the right team.
11) FAILURE TO PROPERLY PACKAGE YOUR BUSINESS
A potential buyer will want information about your customer base, competition, financial history and industry characteristics, such as size, growth potential and areas of opportunity. This information must be provided in a salable format and in a way to ensure your confidentiality. Your financials
must also be recasted to show your business in the proper light. Most financials are prepared to minimize taxes; we work with you and your accounting professional to recast them in a format that maximizes your
12) FAILURE TO CONTROL THE DEAL
We have sold thousands of businesses. We know when to let buyers look at customer lists, when to talk with employees (if ever), when to start and end due diligence, when to hire the right professionals, when to call the landlord and more importantly we know when to refuse access to your business and its records.
There are many opinions on how to sell and buy a business. You need a strong brokerage company in your corner. Again, this is a complicated process with many pitfalls. But with the right team, your goal of selling your business for the right price is just a phone call away.
Andy Cagnetta owns and operates Transworld Business Advisors. He joined the company as a sales associate and later purchased it. Transworld is an international franchise business and franchise brokerage, with thousands of businesses for sale and franchisees in the United States and Internationally.
Certified Business Intermediary
CEO, Transworld Business Advisors