The second biggest mistake in selling a business

10/02/2009 by info.

What is the second biggest mistake a business owner can make when selling a business?

Well it is that business owners do not put their business on the market early enough to enable a business agent to find that buyer who is willing to pay a good price for their business.

You see businesses can take a long time to sell, months or even years depending on the price, location, industry, or condition of the business. Business owners often make the mistake of setting an unreasonably short fixed deadline to sell the business, thinking that it will sell in a matter of weeks then panic or blame the business agent or someone else when it doesn’t sell in that timeframe.

Often these timeframes are set by the next thing that a business owner has already committed to move on to, such as another business opportunity elsewhere, a job offer, or an emigration application.

As the deadline approaches for this new commitment, their desperation to sell increases, and with it the pressure they apply to their business agent to find a buyer.

Often they instruct a second and third agent to sell their business, however this purely shows to the buyer the sellers desperation. Why? Because all the agents advertise in just about the same places, and the buyer sees 3 or 4 adverts for the same business - the alarm bells ring. “There must be something wrong with the business”, the buyer thinks so they look elsewhere.

At the same time, the price becomes increasingly negotiable and the owner can potentially cost themselves a lot of money by selling at a much lower price in order to meet their next commitment.

What happens then is that they will sell at any price, and often dump the agent so that they don’t have to pay any commission and sell to one of their business contacts for a fraction of the businesses value.

I’ve seen it time after time after time.

So if you think you will want to sell your business in the next three years don’t wait until the last minute to instruct an agent, because if time is of the essence you simply will have to be incredibly lucky to obtain a good price.

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