There are a number of reasons why businesses fail to sell. Often it’s despite investor interest and years of proven business success. Let’s take a look at the numbers before we break down the four main reasons.
With only a 10% success rate in selling their businesses, most baby boomers to close up shop and call it a day. Many of them never expected, or planned financially, to be in such a position. s more baby boomers reach retirement age or look to the next phase of their lives. If you’re thinking of selling your business, here are some dangers to avoid.
Lack of Preparation
Selling your business is unlike anything else you’ve experienced for first time sellers. Oftentimes, your business is a labor of love, a life’s work, and a legacy all rolled into one. It may also represent one of the largest assets you possess. As such, it deserves time and attention to prepare it for sale.
Business owners often prepare for years in order to maximize every aspect of they can and make it as attractive as possible to the potential investors and buyers who will be reviewing each detail with a fine tooth comb. As Benjamin Franklin said, “ailing to prepare is preparing to fail.” If you prepare properly, the other reasons listed below may never factor into your equation at all.
Misunderstanding the Market
For many business owners, it is difficult to objectively determine the value and marketability of their own business. A variety of factors shape every business sale, factors that sometimes stay hidden right up to the moment a deal falls apart.
Getting an honest assessment of the market dictates every subsequent move and is paramount to understanding how to market your business, who potential investors are, and what qualities will most attract their attention – for both good and bad.
The American spirit says “I can do it better myself,” and it courses through successful entrepreneurs in every industry. Unfortunately, sometimes our greatest strength is also our greatest weakness. Trying to sell a business is not like selling a car, or even a house. It’s far more complicated and subtle. Your business will need an expert’s guidance to get top dollar. Selling it yourself may also scare off some potential investors or attract the wrong ones to your door.
Lastly, if you’ve prepared yourself, gotten a proper assessment of your business and your market, and sought professional expertise, then you are much more likely to be successful than not. The last hurdle to clear is to make sure your future is in the hands of a reputable, quality broker who is looking out for both of your best interests. It should be in your broker’s best interest to efficiently sell your business for the maximum dollar, just be sure they walk the walk as well as talk the talk.
Recovering from bad advice could set you back years, or it could be complete disaster. Find a reputable company and check their history. Like the stock market, past gains do not guarantee future success, but they’re a pretty good indicator.
Remember, all of these factors are in your control. Do not let years of hard work go unrewarded. Avoid these potential pitfalls, and you can find yourself celebrating the successful sale of your business and entering the next phase of your life with an easy mind.