Selling your business is like embarking on a challenging hike through unfamiliar terrain. Just as hikers rely on their knowledge and preparation to avoid dangerous pitfalls, you must steer clear of costly mistakes to ensure a smooth and profitable sale. Here are four key mistakes to avoid, illustrated by an analogy to hiking, supported by industry statistics:

1. Failure to Plan Ahead: Imagine starting a hike without a map or proper equipment. Similarly, waiting too long to plan your business sale and neglecting to create a comprehensive strategy can leave you unprepared for the challenges ahead. Astonishingly, studies show that around 80% of businesses put up for sale do not sell successfully due to poor planning and preparation. Prepare well in advance by meticulously documenting your business history, maintaining updated records, and building a strong sales portfolio as your guiding tools.
2. Choosing the Wrong Guide: Picture relying on an inexperienced guide who lacks knowledge of the terrain and necessary hiking skills. Similarly, hastily selecting the first merger and acquisition advisor you come across can lead to undesirable outcomes. In fact, research indicates that up to 70% of business owners express dissatisfaction with their chosen M&A advisors. Take the time to find a seasoned advisor who understands your industry and has a track record of successful business sales. This expert guide will navigate you through the obstacles, saving you time and avoiding costly missteps.
3. Setting an Unrealistic Sale Price: Imagine embarking on a hike with a backpack that is too heavy or too light for the journey. Similarly, setting an unrealistic sale price for your business can deter potential buyers or leave money on the table. Studies conducted by the International Business Brokers Association (IBBA) reveal that businesses initially listed for sale at inflated values took 33% longer to sell and ultimately sold for 16% less than their asking price. Consider various factors, such as industry trends, comparable businesses, economic conditions, and market dynamics, to determine a competitive and enticing price. Just as a well-packed backpack provides the right balance, a well-calibrated price attracts interested buyers.

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ABOUT THE AUTHOR

Tim Fawcett CEPA, CAP, CMEA

EastWind Business Solutions Inc.

tim.fawcett@eastwindinc.ca

www.eastwindinc.ca

https://calendly.com/tim-fawcett/30min

Tim Fawcett, the founder and managing director of EastWind Business Solutions, Inc., a merger and acquisition advisory firm that specializes in strategic sales of SMEs with revenue between $2M-$100M+, has provided strategies to over 2000 baby boomer business owners in Canada and the USA, helping them accelerate value and prepare their businesses for sale and guiding them through best practices in exit planning.