Once you’ve decided on selling your small business, get ready for a journey through a thorny thicket! If you’re not careful, you might find yourself stuck by an un-foreseen challenge. Here are five prickly issues you should keep an eye out for:
Dreaming Too Big with the Sale Price
First things first, let’s talk money. Setting a realistic sale price for your small business can be trickier than it seems. If you aim too high, potential buyers might think you’re living in a fantasyland. On the flip side, lowballing can leave you counting your losses. To navigate this, take a good look at your financial situation, check out what’s happening in your industry, and be honest about your business’s worth. Your CPA or a small business exit specialist can also help you determine a realistic business value.
Rocky Earnings and Financial Rollercoasters
Buyers are like detectives when it comes to finances – they’re going to dig deep. If your earnings are all over the place or your cash flow resembles a rollercoaster, you might scare off potential buyers. Before you put your business on the market, tidy up those finances. It may take some time to clean up the financial statements, but it’s well worth it in the end. Keep in mind the ideal time to sell your business is when your sales and profits are on the uptick.
Messy Books and Records
Details matter, especially when you’re selling a business. If your books and records are a chaotic mess, you’re asking for trouble. Buyers want to see the nitty-gritty of your business, and if they can’t make heads or tails of your documentation, you might be in for a rough ride. Spend time getting your paperwork in order – it’ll make the whole process smoother and more attractive to buyers.
Sticking Too Hard to Your Terms
Getting to yes is an art and being too stubborn can be a deal-breaker. Whether it’s the payment plan or the transition period, a bit of flexibility goes a long way. If you’re too rigid, you might send potential buyers running for the hills. Find that sweet spot between meeting their needs and protecting your interests. It’s like a dance – two steps forward, one step back, one to the side.
Forgetting to Plan
Winging it might work for a road trip, but not for selling a business. Lack of planning can turn the full process into a chaotic mess. Take the time to create a solid exit strategy. Map out the steps, address potential bumps in the road, and make sure everyone involved knows the plan. Planning might not be the most exciting part, but it’s the GPS that’ll keep you from getting lost on this journey.
In a nutshell, selling your small business is a balancing act. Keep it real with the price, improve financial results, tidy up those financial records, be flexible in negotiations, and plan like there’s no tomorrow. With these strategies, you can navigate the tricky road to a successful sale, ensuring a smooth transition for both you and the lucky buyer taking the reins of your business.
Let’s Have a Conversation:
What thorns and thistles do you foresee in selling your business? What might get in the way of a potential buyer taking over the reins from you? I’m curious what might prevent you from exiting your business the way you’d like. Please make a comment or ask a question below. Thank you.
