Selling a business is a complex process, especially when it comes to finalizing the deal. There’s a lot of room for error, misunderstandings and unexpected occurrences that can throw the process for a loop. It’s imperative to carefully think through the entire process well in advance and try to be as organized as possible while keeping all parties informed.
We’re going to take a look at the top 10 ways to avoid wrecking a good business deal.
- Confidentiality – At the top of the list for a reason, the number one way to avoid wrecking a good deal is honoring confidentiality. This is vital to not only avoid a breach, but to maintain a level of professionalism and respect. Hiring an experienced business broker in Chicago can help you with the art of maintaining confidentiality.
- Be Flexible – No deal has ever gone “exactly” as it was planned, so be flexible and open-minded as you navigate the process. Never go into a deal expecting all your terms to be met. If you’re too rigid, this can also be a turn off to the other party involved and ruin the deal.
- Be Open to Negotiations – Negotiations are extremely important, and this goes hand-in-hand with being flexible. You may not be able to have all of your terms met, but you can always work something out as a compromise to keep everyone happy and the deal moving forward. Sellers are used to being their own bosses, but when it comes to successfully selling a business, no factor is quite as important as a willingness to negotiate.
- Prepare Ahead – If you want to lessen the risk of losing out on a good deal, make sure you’re well prepared ahead of time. Sellers will want to make sure they have several years of records as well as legal and accounting documentation ready and well-prepared. Serious buyers will want to see these records as well as the financial information for your business. It’s always better to be overprepared in these situations.
- A Realistic Selling Price – An If you inflate your price too high, it will decrease the number of serious buyers that show interest, and could also make the seller seem uninformed. If you’re not sure where to price your business, hiring a business broker can be extremely valuable. If you’re in the Chicago area, visit our home page and contact us to hand over the valuation expertise. One of the best ways to increase your chances of finalizing a sale is to establish a fair price for your business.
- Maintain Operations – Once the business hits the market, it can be easy for the seller to lose sight of the day-to-day operations and “check out” before the business is sold. You’ll want to continue to operate your business as though it’s not for sale in order to maintain the reputation and value of the business. The reality is, it make take months or even years to sell and close a deal, so you don’t want to lose customers, operational flow or value in the process.
- Keep up the Momentum – A sure way to kill a deal is by losing momentum, initiative and letting communication go dormant. The process can be long and tedious, but working with a business broker to help sell your business can help you make sure you take the necessary action, have someone to look to for guidance and who can help you maintain momentum.
- Consider Your Buyer’s Needs – If you plan ahead and have your documentation ready, this will be attractive to any serious buyer. You can expect your buyer will need a variety of information from sellers such as appraisals of assets, information on environmental regulations, and more. Sellers should have this kind of key information ready and waiting.
- Leverage Competition – Encouraging and knowing how to leverage competition can give you a leg up when it comes to closing a great deal. Having a competitive situation on your hands is a good problem to have given that the buyers will know there is more than one interested party. Brokerage industry professionals understand the delicacies of presenting this information.
- Seller Participation – Finally, sellers must stay involved in the entire process. Even after the business is sold on paper, offering to help with the transition goes a long way and creates a lot of trust and respect in the process. This can also help ease buyer concerns and make them more likely to close the deal knowing you will be there to help.
There are many potential reasons why a deal could fall apart. You won’t be able to control every single variable, but by following the ten tips outlined in this article, you will be well on your way to increasing your chances of successfully completing a deal.
For a free consultation on selling a business or hiring a business broker in Chicago or across the State of Illinois, please schedule a virtual meeting http://calendly.com/abameeting or contact us to find out how we can help you achieve the highest value and close on the sale of your business or company.
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