Unexpected issues can severely impact the turnaround time when selling a business. Understanding these potential issues in advance will help sellers better circumvent them if they arise. Here are four unexpected aspects of the business sale process that can pop up:
1. Time Investment
Sellers are typically unaware of the time investment required to filter prospects versus “suspects,” as well as compile all of the necessary documentation required by a potential buyer to complete the sale of the business. An intermediary (business advisor) can assist with these tasks and save sellers valuable time, which they can continue to invest in managing their business and maintaining profitability.
2. Trying to Do Too Much
When a company owner is also the company’s founder, they are used to making all of the decisions. That’s why business owners in the midst of selling will soon find themselves challenged with the desire to fully be a part of both the selling process and the running of the business. Delegating some responsibilities to someone else, such as the sales manager, can be a beneficial move, allowing the business owner to focus on working with the intermediary to maximize the market value of the company.
3. Delays Due to Stockholders
When mid-sized, privately held companies are supported by minority stockholders, these individuals must be included in the selling process—however small their share may be. The business owner will need to first obtain stockholders’ approval to sell by using the sale price and terms as influencers. Of course, issues such as competing interests, pricing disagreements, and even inter-family concerns may cause conflict and further delay the process.
4. Money Issues
Once sellers decide upon a price they would like to see, it is sometimes difficult for them to accept or even consider anything less. After all, a business owner likely created the company and may have a strong emotional attachment.
Another factor that often interferes with a successful sale occurs when sellers instantly turn down offers because they don’t meet with their desired asking price. That’s when the intermediary can often come in to salvage the deal, serving as a negotiator. He or she can work out a deal that is structured in a manner that works for both sides.
Working with an intermediary can help business owners successfully navigate the selling process and address any unexpected issues that may threaten to derail a successful sale.
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Copyright: Business Brokerage Press, Inc.
Photo: iStock Photo, credit: Wavebreakmedia
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