It’s Business, And It’s Personal

Common mistakes companies make during the sale process

| Feb 13, 2020 | Buying & Selling Businesses |

Selling a business can be both an exciting and challenging time in a North Carolina owner’s life. Therefore, it is important for those who are thinking about selling their companies to avoid as many errors as possible when doing so. For instance, it is rarely a good idea to inflate a company’s financial figures. At some point during the due diligence process, a buyer is going to verify those numbers on its own.

Companies may try to take advantage of accounting loopholes or try to include the full value of an office or other shared expenses as an add-back. While taking such a step may make it look like the company is doing great financially, it can also damage the rapport between the buyer and seller. In some cases, it could be enough to kill a deal entirely.

In addition to organizing financial records, companies will need to take other steps to put themselves in position to be sold. Ideally, they will work to expand their email lists or negotiate lower prices with suppliers. This can help to diversify a company’s customer base and improve its profit margin. Ultimately, this will make an organization more appealing to a buyer, which could lead to a higher offer price. It may also make it easier to sell the business in less time.

Selling business assets may be an effective way for business owners to lock in profits as they head into retirement. However, it may be a good idea to have an attorney assist with the transaction. Doing so may make it possible to structure the deal in a manner that is favorable to the seller.

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