5 Big Mistakes to Avoid When Preparing to Sell A Business

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Written By Ideas Plus Business

If you decide to sell your business, which has been your brainchild for many years, then, first of all, this positively characterizes you. Your attitude towards business becomes immediately noticeable. You do not perceive your business as an integral part of your life, but on the contrary, you see your business as a significant and valuable asset.

Speaking of a large company, we can mean the involvement of professional specialists who express their expert opinion on the product for sale, based on which the sale price is formed. For example, if we consider the sale of a large business, such as luxury car rental in Dubai, then we understand that highly qualified specialists will give their assessment.

It will involve specialists such as lawyers, financiers, and appraisers who will be able to review the business, analyze the car rental prices Dubai and provide their expert opinion.

Most of these companies have conducted similar transactions more than once, and they understand what they will have to face. However, small business owners may be facing such a moment in their lives for the first time. This means that during the sale significant mistakes can be made that prevent the ready-made business from being sold at an acceptable cost.

In this regard, we have prepared several recommendations for small and medium-sized business owners who are preparing to sell a business.

1. Awareness and preparation for the selling process

Awareness and preparation for the process

Quite often, there are cases when the owners decide to sell the business, but the process is delayed for many months and years. This happens because they are subconsciously not ready to lose their possession. In other words, everything is fine, but in the soul it is restless. This becomes the stumbling block.

Your inner doubts can critically complicate your situation. You will put off making important decisions and hope that the desired buyer will appear from nowhere and make you profitable offers. Lack of effort can turn out to be a buyer, but you will sell your business for a pittance.

You must understand that your business is the same product that needs to be sold and for this, you need to prepare it for sale and carry out all the necessary work. However, it should be understood that this product is complex and expensive. To achieve a result, you need to find a specific buyer who can truly appreciate the effort invested.

If you nevertheless decided to sell, then you need to approach this matter seriously and with a sober head. During the preparation process, you can get very tired of paperwork and other things. It is therefore recommended that you take a break.

You can go on vacation or travel to get back to work and make decisions with full responsibility. After the break, you will be able to soberly assess the positive and negative aspects, as well as do whatever is necessary to make your product desirable for customers.

2. Create the image of the ideal buyer

This is not to say that selling your business is an easy task. There are a lot of pitfalls in this process. One such challenge is finding the perfect buyer.

Every owner dreams that there will be a candidate who will not only pay a good amount of money for a ready-made business but also continue to do everything necessary for the business to flourish. However, this is extremely rare.

Basically, among the clients, you can find several interested types of people. The main prerogative of the first type is a profitable investment of their funds. Such people strive to get a significant income from investment in any kind of production. They may view your business as a way to build their home equity. Upon purchase, such buyers will improve the business to increase market value, and then make even more money after the sale.

Another category of buyers has a certain strategic plan. They can view business as a sum of benefits. Such benefits can come from valuable business partners, connections, and a successful track record.

In this regard, each owner must understand which successor he needs. After determining the parameters, you can create a profitable offer that can interest potential buyers. You will be able to look at your business from the perspective of the desired buyer and easily determine which advantages are worth demonstrating first.

3. Caring for buyer’s needs

Caring for buyer’s needs

Among the many owners, you can often see those who talk about their business like their child. For them, their business has a special place in their hearts.

In production, you can have many unique things that you invented yourself. However, do not rely on the fact that your customers will also be sensitive to the established procedures. Each of them will have a specific purpose for which they need to buy your business.

Someone may be pursuing the goal of integrating your business into the network of an existing one to expand the scale and increase the possible income. Another buyer will want to purchase your business to make a present for their child or lover. They will not be interested in work processes or financial statements. Some may use your ready-made business as a vehicle for their own ideas.

It is important, first of all, to realize what and with whom you will have to deal. After getting acquainted with a potential applicant for the role of the owner, it is important to study him and analyze his motives. This way you will be able to present your business as what they want.

For some clients, you will need to focus on the expected income, for others the ability to win a new niche in the market, and for others, present your business as an exclusive piece.

4. Transformation time

Transformation time

Imagine that you are selling a car that has been your travel and transportation assistant for many years. First of all, you understand that the car is no longer new: somewhere there are chips in the painting of the car, there are worn seats in the cabin, and everything is not so perfect under the hood.

Every seller wants to get the best deal possible. In this regard, we are going to wash the car, change the oil and vacuum the interior. This is necessary to highlight the advantages and hide the disadvantages.

This analogy applies well to selling a ready-made business. Before the sale, it is necessary to carry out cosmetic repairs so that potential customers do not have any complaints about what they see.

Many owners believe that they have already invested enough money in the creation and prosperity of this business and rely on the fact that a seller will still be found. This is true. However, there is no guarantee that you will receive the desired cash offer. You need to make cosmetic repairs to your business.

One of the snags that get in your way can be that you won’t see what is worth fixing and putting in proper shape. It may seem to you that everything is perfect, but in fact, it may not be so. This is why you need an outside observer who was not previously familiar with what you are doing.

It should be said that the services of such specialists can be expensive. If you are not ready to first spend money on this service and then invest money in improving the infrastructure, then you can contact your friends who will get to know your business better and will be able to point out the striking shortcomings.

After the audit, you can find out that improvements will require a significant investment. However, we hasten to remind you that spending, which will amount to several thousand dollars, can later increase the selling price, which will amount to several tens or even hundreds of thousands of dollars more.

5. Fair words butter no parsnips

Every buyer will be interested in the long-term outlook, as well as future income. Owners of the large business draw up long-term improvement strategies regularly and also draw up a business plan for several years in advance.

Representatives of small and medium-sized businesses cannot always boast of having such data. They mostly rely on their intuition. However, your words and great stories about the future may not inspire potential owners. People who have been in business for years know that words are not worth much. Only calculation and prognosis for the future are important.

This is why you have to work out goals for the future and back them up with financial statements. Having a plan will convince customers of your professionalism and leave no doubt about the purchase.

Conclusion

You are faced with a laborious task that requires additional financial investments and careful calculations. Forget about emotions and your worries. You must approach this issue with a sober head, clearly identify the pros and cons, and do whatever you can to get your hard work back.

Disclaimer. The views and opinions expressed here are those of the authors. They do not purport to reflect the opinions or views of IdeasPlusBusiness.com. Any content provided by our bloggers or authors is of their opinion and is not intended to malign any organization, company, individual, or anyone or anything.

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