Avoid These Costly Mistakes When Selling Your Chicago Business
Selling a business is a major project, and you should expect some hiccups along the way. The right Chicago business broker can help you navigate the process, but many sellers are still novices when it comes to putting their business on the market. Here are five costly mistakes you must avoid when you sell your Chicago business.
Selling a business is a major project, and you should expect some hiccups along the way. The right Chicago business broker can help you navigate the process, but many sellers are still novices when it comes to putting their business on the market. Here are five costly mistakes you must avoid when you sell your Chicago business.
Inadequate Preparation
Before selling your home, you’d focus on curb appeal and modernizing the design. But many owners simply put their companies on the market and expect buyers to clamor to purchase it. You need to clean up everything before selling your business if you want to sell it for top dollar. Some things to focus on include:
• Excessive or unnecessary tax deductions, especially if you have run many personal expenses through your company.
• Disorganized books and records. Buyers hate risk. They hate it even more when they can’t look at your books and discern how much risk they are taking.
• Staffing and management. Your business must be able to run well even in your absence. That depends on having the right staff in the right positions.
Not Hiring a Professional Business Broker
Entrepreneurs are the sort of people who are willing to take on any challenge. You’re probably great at sales and talking to people, and perhaps you believe this sale is no different than the hundreds of others you've managed. Your business is different. Not only is it more complex; it’s also too close to you for you to be able to sell it while adopting the perspective of a disinterested third party. And even if you could, doing that would take your time away from running your business.
You need a broker. A broker lends credibility to the deal-making process, and helps level the negotiating table. They also free your time so you can focus on running your business. The last thing you need as you move toward a sale is for the company to lose value.
Not Being Involved in the Process
Although you need a broker to help you sell the company, they cannot do it alone. After you hire an expert, you can’t just forget about the sale process. You’re the final decision maker, so make sure you understand what decisions you need to make, and how they might affect the sale process.
Focusing Only on thePositive
It’s fine to tell a positive, inspiring story about your company, but don’t lie to the buyer. Be upfront about the drawbacks, because diligent buyers will find them anyway. And when they do, they may walk away. Outright misrepresentations can even expose you to legal issues after the sale.
Not Thinking About Sale Structure
It’s easy to feel excited about an offer on your business. What you may not realize is that the way you structure the transaction can affect your long-term involvement in the company, your liability for anything that goes wrong, and the final sale price. Work with your business broker to decide on the right sale structure; don’t just accept the first thing the buyer offers.
