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Key mistakes to avoid when selling a small business

On Behalf of | Sep 4, 2019 | Buying & Selling Businesses |

According to the Exit Planning Institute (EPI), over 4 million companies will be put on the market in the next 10 years. Those businesses are worth more than $10 trillion, and the owners are mostly older individuals who are planning on using the money to fund their retirements. However, only about 30% of those companies will be sold. This is because many North Carolina business owners make key mistakes that complicate their efforts to exit gracefully.

For instance, a business may have outsourced its accounting or other administrative functions. While this may have made sense to the current owner, a buyer wants to have as many in-house components as possible. This can make it easier to develop strategies to improve margins and profits in the future. As with selling a home, curb appeal matters when trying to sell a business. Therefore, those who run their own companies should make sure that the books are in good shape and that physical assets look like they’re in good condition.

Ideally, financial records will be accurate and thorough for at least the past five years. Individuals who are looking to sell their companies should be flexible concerning how the sale is structured. Instead of demanding a lump-sum payment, it may be best to accept installments or other terms that work better for a buyer.

People who are endeavoring to sell their companies should give themselves several months or years to prepare for the sale. It may also be a good idea to seek counsel from an attorney when it comes to buying and selling businesses. He or she may be able to find buyers, negotiate with them and take care of any problems that may arise. A lawyer may also handle any issues that could crop up after the sale has been completed.