Below are four pitfalls to avoid when selling your business:
1. Incomplete Documentation. One of the most important documents that you will furnish to the prospective buyer is a Confidential Business Review that you need to complete. Of course, this will only provided when your prospect signs a Confidentiality Agreement. In this document, you need to make sure that every bit of information that you provide is accurate and complete because failing to do so will only create conflict between you and your prospective buyer. You might end up blowing up a really good deal.
2. Mentioning the Price. When you go to the market, make sure that you do not commit this very critical mistake. A lot of business sales have been blown off by their own sellers who tell prospective clients of their price. What you need is for the buyer to tell you how much he or she is willing to pay for your company and from there, state how much you actually expect. You will then create the ceiling for your negotiations.
3. Sharing confidential information. As previously mentioned, you do not share your company's most intimate secrets until your client signs-and delivers-the Confidentiality Agreement. Of course, it would be best to have an experienced lawyer draft your Agreement to protect your company.
4. Failure to comprehend the intangible assets of your company. Before putting your company in the marketplace, make sure that you understand every valuable aspect of your company, including the intangible ones. Make sure that you know the strength of your firm as well as the unique and competitive features of your company because it is only through these features and attributes that you can communicate the true value of your company.
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