1. Not knowing what the business should sell for.
One of the most costly errors a business owner makes is not knowing the approximate price of his or her business prior to entering the selling process. Before making the decision to sell, owners should work with someone qualified to place a price on their company.

2. Not preparing the business for sale.
Prior to exposing the business to the marketplace, preparation is necessary. A business certainly isn’t a house, but the same attention to appearance prior to sale is necessary. Financial and legal affairs should be current. Anything a potential purchaser might want to see should be up-to-date and accurate.

Preparedness makes prospective buyers feel comfortable. Being unprepared can delay a closing, create costly catch-up expenditures, and cause purchasers to lose confidence. Too much time almost always works against the sale.

3. Not being able to see the business through the eyes of a buyer.
This is difficult for any seller. It’s only natural to see one’s own business in a favorable light and overlook the blemishes and problems. Sellers must approach their business realistically and recognize any deficiencies, knowing potential buyers will be doing the same.

4. Not really knowing the buyer.
By knowing the buyers, their motives and interests, a seller is better equipped to make informed decisions. Are their interests the same as yours? If you, as the seller, are financing the deal, do you feel confident the buyer can make the payments?

The more you know about why a buyer wants to buy your business, the better position you’re in to know when to be firm in the negotiations and when to be flexible.

5. Trying to sell the company to a buyer who doesn’t want to buy.
There are usually many more potential buyers than businesses for sale. The question is–how serious are they? A buyer may show a great deal of interest but when it gets down to the wire, he or she may back out of the deal. Some buyers want to buy only on their terms and conditions, while others only want to buy the “perfect business.”

6. Being your own worst enemy.
Many business owners feel that no one knows their business like they do. They don’t need, or want, any help. They think they’re lawyers, accountants, and business brokers all rolled up into one person. Then, when the going gets tough, they become impatient and inflexible. They then blame others, usually the buyer, when the deal blows up. As the old saying goes: “The attorney who represents himself has a fool for a client.”

7. Not understanding the structure of the deal.
Regardless of the size of the deal this could be the scenario: an offer is presented, the seller takes one look at the price, immediately says “no” and refuses to look any further. The price, within reason, is immaterial. The real crux of the deal is how it’s structured. Consider the negotiating axiom “You can name the price if I can name the terms.” The terms and conditions are important.

8. Not being able to walk away from the deal.
Too many sellers get so involved in trying to put a deal together that they don’t see the big picture. They don’t realize the deal isn’t a good one. Since they’ve invested a lot of time and effort, and probably expenses, it’s often difficult to just end it, but it’s much better not to do the deal than to do a bad one.

9. Waiting too long to sell.
Too many owners wait until the last minute to decide to sell their business. They wait until business is down, or they’re completely burned-out, or their business partnership has soured completely. The time to sell is before the emergency happens. The time to sell is when business is good.

10. Changing your mind.
The sale is progressing nicely, the buyer is happy and the seller–well, the seller is contemplating life without the business. He or she realizes that when the business is gone, they’ll have nothing to do. Just before the closing, the deal starts to unravel. So, wait until there’s not one shred of doubt before starting the selling process.

Nancy Cofield is president/broker with
Corporate Investment International of
North Florida, Inc. She can be reached
at 996-1666 or ncofield@corporateinvestment.org.