Common Mistakes Sellers Make

When you’re selling a business, there are a lot of moving pieces. That means there are ample opportunities for things to go wrong. It’s always best to be prepared. When mistakes are made, it cannot only mean a significant expenditure of your time, but can also cost you money. These kinds of issues can derail your deal completely.

This points out the importance to work with an experienced business broker. When you sell a business, it should come as no surprise there is a great deal of paperwork. Your business broker will work with an attorney and guide you to make sure that all necessary preparations have been made from a legal perspective. When your prospective buyer sees that your legal “ducks are in a row,” he or she will feel more confident in your organization and level of professionalism.

One document that often is overlooked is the Letter of Intent (LOI). Sellers assume that things will move along more quickly if they forego this document. Keep in mind that the LOI truly has its place in almost any deal. After all, it not only outlines both parties’ expectations in writing, it also works to protect your best interests. Even though it is not a legally binding agreement, it is unlikely the buyer will walk away from the deal once the letter of intent is signed.  

What if your deal falls through completely? Will your buyer then reveal to the public that your business was for sale and even the potential terms that were on the table? This could indeed occur if you were not backed up by an NDA. Don’t skip this very important document either. Your business broker will be very well acquainted with NDAs and guide you in the best way possible. 

Warding off these kinds of issues is one great reason to be equipped with a team of professionals to turn to for advice. This team should include your business broker, accountant, and attorney. 

Thinking about selling your business? Give us a call to arrange a confidential consultation.