The process of selling a business can be intense, especially for owners who have put so much of themselves into growing their company. From valuation to payment structuring to the fate of existing personnel, there are many things to consider when selling a business. With so much to think about, there are a few things that are commonly overlooked by Detroit business owners eager to make a deal. Forgetting these things can lead to pitfalls down the line, so it’s a good idea to keep them in mind before signing the dotted line:
Confidentiality
Many people overlook the importance of confidentiality when looking for a buyer quickly. They may think that the more people know they want to sell, the more possible purchasers will approach them. However, being public about the intention to sell can have unintended consequences. Employees may choose to move due to job security concerns, customers may jump ship for the same reason, and rumors could begin to swirl about why the business is for sale. Keeping cards close to one’s chest can be a smart move for these reasons.
Financials
Not having financial information in order can lose business owners a sale for many reasons. A prospective buyer who might be ready to move forward will likely demand these details prior to engaging and move on if they aren’t readily available. Or an overvalued business could become impossible to sell, leading to frustration. Doing calculations and having the numbers ready first can save a lot of heartache down the line.
Timing
There is no perfect moment to sell a business and waiting for that magic time can be fruitless. However, people who wait until they just can’t wait any longer could end up in a bad situation. Instead, keeping an eye on valuation on an ongoing basis, as well as consistently considering one’s personal circumstances, can help people pick the right time for them — even if it isn’t “perfect” per se.
Selling a business is no easy task. While some people are particularly skilled at this type of negotiation, many enter the field of selling with limited background in how these transactions work. It could therefore prove invaluable to speak with an experienced business lawyer early on to fully understand what legal considerations will be involved in the selling process.
