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Selling your small business? Avoid these 5 mistakes

A business sale is not necessarily a sign of defeat. Indeed, a sale can be a mark of success—especially if the business owner is able to sell at a profit. That’s not to say that all sales will be successful, though. There are many mistakes along the way that can cost business owners dearly. One of the best ways to avoid these pitfalls is to understand them, anticipate them and do your best to avoid them. If you are selling your business, you should know these five mistakes to avoid.

  • Selling at the wrong time

It can take anywhere from two to four years to sell a small business. Therefore, it is crucial to plan ahead so that you can anticipate the best time to make the sale. Without adequate planning, you could sell your business at the wrong time and suffer a major financial loss.

  • Neglecting marketing

Buyers will not magically know that you are selling your company. It is up to you to spread the word through marketing, advertising and promotion. The more people you reach, the more buyers you may find.

  • Pricing the business too low or too high

Setting the right price can make or break a sale. Price your business too high, and buyers won’t bite. Price it too low, and you could lose money. When setting a price, research the market, talk to other business owners and consult your broker or attorney.

  • Having inadequate representation

Some business owners believe that their own business acumen will be sufficient to represent their company in a sale. This misjudgment could be a major error. It is crucial to have experienced, powerful representation in a business sale. Consult a local attorney who has experience in business law and can help negotiate a beneficial deal.

  • Choosing the wrong seller

Not every buyer is equal. A buyer who makes a high bid may turn out to be inexperienced, while someone with a lower bid may be an excellent candidate to grow the business. Don’t necessarily settle for the first or highest offer: Carefully consider what each buyer is really offering.

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