Selling a business in Michigan is likely to be a less stressful experience if the business owners have done their homework and has realistic expectations. While the sale of a business may sometimes throw up completely unexpected problems, some common pitfalls may be avoided when proper preparations are made prior to putting the business on the market.
One common mistake that business owners make is trying to do everything themselves. An entrepreneur can quickly find themselves swamped with unexpected details when selling a business, and a team of accountants, sales professionals and appraisers could prove invaluable. Appraisers could be particularly useful to business owners who have unrealistic ideas about the value of their company. Just as in real estate, the true value will be determined by the market and the performance of similar businesses. In some cases, an expert valuation may reveal that a company is worth significantly more than the owner had imagined.
Putting a business on the market at the wrong time is another common misstep. While a business may be listed for sale due to pressing financial concerns, it may be prudent to wait until balance sheets and income statements at their healthiest before taking this step. Rushing a company onto the market is another common error. It generally takes between six months and a year to properly prepare for the sale of a business.
An attorney familiar with the area of business acquisitions and sales will likely be aware of the sometimes costly pitfalls that can trap the unprepared. Entrepreneurs are often optimistic by nature, and they sometimes overlook thorny issues when the broad strokes seem attractive. While this outlook may provide a foundation for success, an experienced attorney could provide an effective voice of caution and prudence during business negotiations.
Source: Inc., “ 5 Pitfalls to Avoid When Preparing to Sell Your Business“, Curtis Kroeker, October 31, 2014