Often small business owners, particularly with companies that are being sold under a million dollars, assume it is possible to sell the business on their own. While occasionally it can be a good option, particularly if the buyer is known and if the transaction is very simple, this is rarely the case. In Santa Clara Country, CA, there are several common mistakes that occur on a regular basis when a business owner tries to handle a business sale.
To help prevent these issues, any business for sale should be marketed through a specialized business broker. This provides the professional experience needed to avoid these mistakes and to also get top asking price for the company. To understand the risks of handling a business sale, here are some of the most commonly seen errors with owner sales.
Asking Too Much
Business owners are aware of the time, energy and money that went into building the business from the ground up. However, when determining the market value, a business for sale is not going to be the sum of those dollars spent and the time poured into the business. Instead, it will be a factor of the assets and inventory, the customer base and the other tangibles in the company.
Most sellers overestimate the value of their business. This results in an elevated asking price that prevents qualified buyers that know the market from making an offer.
Failing to Create an Accurate Financial Statement
Any buyer will want to have current and accurate information about the business. When marketing your business for sale, it will be essential to have this information available to qualified buyers to allow them to inspect the financials of the business.
Mistakes, errors or omissions in these documents can be significant, and may even be grounds for legal action by the buyer. It is essential to have all these documents accurately in place and available to the buyer.
Incorrect or Inaccurate Customer Information
For some small businesses in Santa Clara County, CA, their customer base is their biggest asset. Not having the customer database accurate, up-to-date and searchable is going to result in less buyer interest.
Technology and using the at least current manufacturing and sales technology is going to be a very big consideration. Buyers are aware that this is an expensive and time-consuming upgrade, and having old, outdated technology and IT systems are going to negatively impact the selling price of any company or business.
