When it's time to sell a business, some business owners might go it alone in an attempt to save the money needed for professional assistance. But selling a business alone can lead to many potential roadblocks: business owners can be distracted from their business, unable to find qualified buyers, and have trouble with proper valuation. For these reasons and more, business owners should avoid selling their business on their own, and instead use an experienced and trusted business advisor, who can help business owners maximize the value of their business and avoid facing the following unfortunate consequences.
- Selling becomes your full-time job. Although ultimately rewarding, selling a business is an intense, demanding project, and this is especially true for business owners who spend a lot of time running their business. Throughout the selling process, business owners must keep the business operational as they add improvements and renovations. When business owners go it alone, the business often suffers, hurting the business's value in the sale.A business advisor can manage the sale process with you, freeing up time for you to keep your business thriving and growing. The advisor's job includes preparing the sale, gathering documentation, marketing the business, vetting buyers, showing the business to buyers and negotiating. Although you will still be involved in the selling process, you will have a considerable amount of distracting work taken off your plate.
- No buyers. Unless you have a family member, business partner or employee that is interested in purchasing and running your business, it can be difficult to find qualified buyers. If you advertise the sale openly, you run the risk of losing employees, customers and vendors, which can negatively affect your business and lower your potential selling price.Fortunately, a business advisor has access to a network of qualified buyers. They can strategically identify and appeal to a group of buyers that is likely to be interested in your business, without exposing your business's identity in the process. Advisors understand the value of buyers in your industry and market, allowing them to highlight the best aspects of your business for sale in order to generate buyer interest.
- Under- or over-valuing the business. The valuation of a business is a complex process. Without knowledge of valuation methods, a business owner may set the initial selling price of their business too low or too high. Sometimes, business owners are not aware of their business's assets and earning potential, so they end up undervaluing the business. At other times, owners have overconfidence or an emotional connection to their business, and they may begin with an unrealistic asking price.A business advisor can help you get an objective and realistic valuation of your business that can be justified at the time of the sale. When you work with a business advisor, this initial valuation is only the starting point. While it is challenging for most business owners to drive up the selling price, a business advisor who is experienced in marketing and negotiation can maximize the value of your business by putting the business in front of multiple strategic buyers. Once several buyers are interested, the competition will significantly escalate the selling price of your business.