The COVID-19 pandemic proved to be a difficult time for small businesses. Many had to close their doors, and even more had to make drastic changes in order to stay afloat. 

Thankfully, as we enter 2023, there are signs of hope for small business owners. While the pandemic was a major setback, it has also provided an opportunity for small businesses to innovate and adapt to the changing times.

This new year may also prove an excellent time to sell your small business. Many companies were sold at record prices in 2022, and the buyer demand looks like it will continue to stay strong, giving sellers an ideal position for negotiations.

Still, selling your business in any kind of market requires strategy and expertise. If you’re thinking about turning your business over to someone else this year, here are three common pitfalls you need to actively avoid (and how business broker services will help).

1. Making the Sale Too Public

Selling a business is a long, important decision that requires careful planning and execution. To ensure the success of the sale and the stability of your company, keep the process under wraps, especially in its early stages. Employees, customers, competitors, and other stakeholders should not be aware of the sale until it is finalized.

Confidentiality is a critical factor when it comes to selling a business. When the sale of a business is made public too early on, it can have serious implications for both the buyer and seller. 

For example, competitors may try to swoop in and disrupt the sale or client base. You could also lose goodwill with customers, and employees could become uncertain about their future and start looking for other jobs, damaging company morale and resulting in lost talent.

This is one of the top reasons to consider working with business brokerage services. An experienced broker will help you navigate listing and selling your business and keep the sale discreet throughout the entire process. They will also offer advice on how to maximize the value of your company and negotiate a successful small business sale. 

2.  Not Preparing Your Documentation

Are your records a mess? What about your finances? 

Selling a business is a complex process that requires a great deal of preparation and planning. It’s critical that you make sure that all of your documents are in order before you list your business for sale.

Accurate and up-to-date financial information will help you get the best possible outcome from the sale and reduce the risk of potential buyers walking away. It also helps prove your company’s value more accurately, which could result in a higher selling price.

Taking the time to organize your finances and records will save you time and money, and it might even be the difference in making the sale at all. 

Have all the necessary documents organized and prepared before entering negotiations for selling your business. This includes…

  • Financial statements
  • Legal contracts
  • Tax documents
  • Other important information about your company

Having these documents in order will help potential buyers make a fully informed decision about whether or not to purchase your business. Additionally, these documents will allow you to respond quickly to any questions or concerns that buyers may have during negotiations.

Need help getting organized? A good business broker will provide guidance and advice on the best way to prepare, file, and present your records, ensuring that you have a comprehensive system in place for compliance with legal requirements. 

The best business broker services will also help you create an efficient system of filing and archiving documents, making it easier to access important information when needed. This includes setting up digital document management systems so that all of your records are securely stored in one easily accessible place.

 3. Listing Your Business for Too Little (or Too Much) 

Setting the right price for a business is a big part of the sale process. Unfortunately, many business owners make mistakes when pricing their businesses and end up not getting the best offers. 

This is where a good business brokerage service comes in.

Business brokers are highly experienced professionals who help business owners determine the right price for their businesses. They use their expertise to assess the value of a company, taking into account its assets, liabilities, and potential future earnings. 

With this information, they then provide accurate pricing advice that helps business owners get the best possible deal when selling their companies.

Keep in mind that listing a business too low can leave money on the table. However, if you list it too high, you may not be able to attract buyers. Additionally, many buyers might be deterred from considering a purchase after the price is lowered. 

It’s best to ask an experienced small business broker to value your business so that you can be confident you’re starting at the right price. Brokers for small businesses will help you determine an appropriate listing price to maximize your return on investment.

A business broker will also help you…

  • Evaluate the current market conditions
  • Research similar businesses that have sold recently
  • Understand what buyers are looking for

Business brokers are invaluable when it comes to selling or buying a business, as they have extensive knowledge and experience in this area. Don’t just slap price tags on businesses for sale without getting professional input. 

Ready to Sell Your Small Business?

Business owners looking to sell their businesses will benefit from finding reputable business brokerage services. An experienced broker will help navigate listings and protect them from making many common mistakes.

Are you looking to buy or sell a business? Are you hesitant to navigate the process alone? 

Experienced M&A broker Chris Smith is here to help. Chris understands that buying or selling a business can be a daunting task. That’s why he works with many small business owners, arming them with advice and knowledge to execute the transaction smoothly.

If you have any questions or would like more information about buying or selling a business, don’t hesitate to reach out. We look forward to hearing from you!