Dos and Don’ts When Selling a Business

Selling a business is a huge decision. It’s one that you probably took months to come to, and that will have a huge impact on your lifestyle moving forward, not to mention those of your staff and employees.

With that said, once you’ve made the decision, there is still a lot of thinking to be done. Making sure that your business sale goes well is a matter of ensuring to take certain steps, while at the same time avoiding some common mistakes. Here are the top dos and don’ts to keep in mind once you begin.

DO: Tell your staff once the transaction is confirmed

Keeping staff in the dark, or trying to dress up the truth is a mistake. While you might think that your priority should be to keep your team calm, the real priority is to respect the years they’ve worked for you by giving them the information they need to plan ahead. They will respect you more for it, and the end result will be a smoother transition for everyone involved.

DON’T: Announce that you are looking to sell right away

That said, there is no need to announce your intention to sell as soon as you get the idea. This can cause undue panic, can cause ripples in the market you operate in, and can ultimately undermine the value of your business before you’ve even begun!

DO: Consider the different variables involved in your transaction

Selling a business can mean a lot of things. It can mean selling everything you’ve built wholesale, but it could also mean selling your brand and trademarks while hanging onto your clients list. Consider all your options!

DON’T: Stick to one form of valuation

There are lots of different ways to value a business. Understanding this can help you to land at a better (but still fair) price for your business.

DO: Negotiate

Negotiating the best price can make a huge difference to your eventually profits. Don’t just accept the first offer – let your business broker do their job!

There are many techniques that can help you to win a negotiation. These include things like “priming” and “anchoring” which can help to get the buyer in the right frame of mind to buy. 

DON’T: Be blinded by your personal stake in the matter

Keep in mind that you are very close to the situation and likely value your business far more than another person would. Keep this in mind and don’t come in with unrealistic expectations.

Likewise, remember that a good negotiation should be focussed on finding a satisfactory compromise that everyone is happy with. This is another reason to consider using a broker who is more detached from the situation and thus able to offer a more realistic value.

Keep in mind that the objective of any good negotiation is to find a compromise. You want both parties to come away happy. The aim is not to “trick” anyone into buying your business for more than it is worth!

DO: Get help

Using business broker firms can help you to sell your business for more. Using accountants can help you to better get your accounts in order. Using legal advisors can help you to navigate the sometimes complicated process of selling a business from a legal standpoint. In short, using professionals makes your life easier, and results in a better sale!

DON’T: Rush!

Selling your business can take time. If you are in a rush, then you will risk making mistakes and potentially selling for less. So take it slow and try to enjoy the last days running your business.