Introduction

The process of selling a small business is complicated, and if you make mistakes, it may cost you a lot of time and money. Having a good plan means that you will get through the sale and the deal gets you the most money. Below are the common things that you need to be aware of and avoid for a successful sale.

Overpricing or Underpricing the Business

You can give two different impressions of the business to buyers if the price is set wrong. This is how they differ:

• The first is contacting the competent professionals who will carry out the business valuation to establish the price of the business openly and honestly.
• The second is identifying price movements by exploring the market situation.
• The third is discussing and settling the price with the buyer.

Overpricing can scare potential buyers away, and underpricing means losing money. A considered and unbiased valuation is a prerequisite for luring potential buyers who mean business.

Poor Financial Documentation

One of the most important things for the buyer is a clear financial flow. You are recommended to:

• Provide financial reports and tax returns for the last three to five years in order to show the buyer the real state of your business.
• Eliminate from your records the unnecessary bills to pass the image of a money-making enterprise.
• Prepare a financial plan which will include a demonstration of how to sell a small business will grow and develop in the forthcoming months and years.

By properly accounting for all the financial activities, you are sure to get more trust and support from the potential clients.

Not Preparing for Due Diligence

Due diligence is a process of investigating a company that is going to be bought, and that investigation will include all financial and legal aspects to ensure the company is in good standing.

• The buyer is also considered a beneficiary of the same documents, contracts, and agreements for review.
• However, the buyer should expect no other to deal with the share of the assets and operations.
• Another important thing is to define the plan and communicate them.

The initial stage of disorganization of the company can have many negative effects on the company, some of which include delays, or at worst, the transaction not being approved. Not just that, but it also might bring unnecessary disadvantages to the company, leading to failure in the sale.