The sale of a business involves its further transfer to the new owners. This means that the seller must develop his exit strategy in advance. The preparation of such a strategy can be done independently or can be entrusted to business brokers for business sale of a level not lower than WebsiteClosers.
In any case, it is important not to make mistakes when planning such a strategy. To avoid them, it is worth at least studying the basic mistakes when planning such exit strategies. Let’s analyze them in more detail.
Types of mistakes when forming a business plan for exiting a company
For a business owner neglecting to create an exit plan is disastrous. Without a plan, he will not be able to act correctly and quickly. Because of this, the transfer of rights to the business to the new owner may stop. In critical situations, it will lead to the cancellation of the transaction. Therefore, it is better to avoid the following mistakes:
- postponing planning;
- neglecting diversification;
- failure to account for taxes;
- overestimating your own company.
If these mistakes are avoided, the business can be sold very quickly. Let’s look at the consequences of each mistake in more detail.
Postponing planning
This point is one of the most important. Exit planning should start early and if you start exit planning too late, you can lose time and money. If you postpone the time of exiting the business a little, it is not critical. But if you solve this moment directly during the sale, then there may be a legal conflict. This can also disrupt the plans of the new owner and not allow you to complete the transaction. That’s why exit planning needs to be done upfront and understand at what stage to start it.
Failure to consider diversification
Your business may be your greatest asset. But if you decide to sell it, it is better to take care of other sources of income besides the business. In this case, there will be no failure to get a professional business valuation. You can invest the income from the business in securities or additional real estate. Then the loss of business income will not come as a surprise to you while you are reinvesting the proceeds.
Failure to account for taxes when selling a business
This is a rookie mistake and it is not about undervaluing your business. The seller wants to get a certain amount of money for his business. But he should take into account that from the transaction he will have to pay taxes on:
- profits;
- capital gains;
- property.
As a result, the amount received by the seller will be lower than the amount specified in the contract. This point is extremely important to consider in the value of your asset when selling.
Reassessing your own business
The reverse of the previous point. It may seem to you that your company is worth millions. But by overvaluing your business you look like an amateur in the eyes of the buyer. Therefore, it is worthwhile to conduct an independent evaluation, understand the real value of your business, and only then start looking for buyers. This point is of crucial importance in the eyes of the buyer and such a mistake for business owners is unacceptable.
Who will help you avoid such mistakes?
If you do not prepare your business for sale, it is only your fault. To avoid such mistakes, it is best to hire professionals who know how to sell a business properly. The staff of WebsiteClosers is ready to help you in solving this issue. Our specialists have vast experience in selling different companies and will help you quickly find a reliable buyer to conclude a contract.
Additionally, searching for a term like “Adelaide business for sale” on the internet can connect you to platforms that specialize in helping business owners list and sell their ventures. These platforms often provide tools and resources to streamline the selling process, from valuing your business to reaching potential buyers in targeted markets. Leveraging these online resources can save time and increase your business’s visibility among qualified prospects.
