8 Common Mistakes in Selling a Business Yourself in Kansas City

As a business owner, you are doing everything. If you started the business, you had the fun of putting it together, planning it, hiring the workers, buying the furniture, and far more. According to Greg Mends from Kansas City, Perhaps as you grew, you brought in employees to assist you, but you're pretty confident you'll "figure things out".

This is why some business owners consider selling their business themselves still. Certainly, they know the business better than anyone else. Sadly, many legal and financial pitfalls lie ahead for the business owners that choose this path.

To help you avoid these pitfalls, here are the foremost common mistakes explained by Greg Mends that business owners make when trying to sell their business themselves.

1. Not establishing fair value. the important value of any business is what someone is willing to buy it. Without seeing the data about comparable businesses and having a compassionate what buyers want, you can't establish a good value. Without establishing a fair market price, the owner often wonders if they got the foremost for his or her years of toil within the business.

2. Letting emotions become involved. because the owner of the business, you're at a drawback for negotiating because you're emotionally attached to the business. it's always wiser to own a third party to negotiate for you. One business owner "fell in love" with a pair and drastically reduced the worth of the business for them, because she liked them. Sadly, 4 months later she was suing them for not paying on the vendor financing.

3. Not thoroughly qualifying a buyer. It's easy to satisfy someone and like them and skip fully qualifying them as a buyer. this will cause a protracted, drawn-out path that wastes your precious time and destroys your business. For instance, take the individual that seems very inquisitive about the business.

He asks heaps of questions and you share everything you'll about your business in hopes he will die. In the end, he says he's not interested. Months later you see him open a business like yours around the corner and take your customers. Without asking the correct questions and thoroughly qualifying a curious buyer, you may be giving your competition invaluable details.

4. Using standard templates for seller financing. once you offer to finance a part of the acquisition, this opens you up to liability because of the owner. What if the new owner doesn't pay you? What repercussions does one have? If you had a template agreement, you may not have much protection as you're thinking that.

These agreements are often not specific enough and most offer little protection. employing a legal professional accustomed to seller financing can't only protect you financially, but also legally if you ever must take action for nonpayment.

5. Choosing the wrong closing attorney. Many business owners aren't aware that there's a difference between a deal-maker attorney and a deal-breaker attorney when selling businesses. Some attorneys will "kill" the deal at the closing.

Others will push to assist make the deal fair and facilitate your selling the business. Without experience with an attorney, you're taking a large risk whether or not they will facilitate you're getting the deal closed or will break the deal at the last moment. Not all attorneys are identical.

6. Business stagnates or slows down. because the owner, after you specialize in the task of selling the business, often the business slows down or stagnates. This becomes a red flag for a brand new owner and reduces the worth of the business.

It's a highly time-consuming task to sell a business. Between marketing the business, answering potential buyer calls, getting documents together, responding to attorney/account requests; it's easy to require your eyes off growing the business. Because the worth of the business is predicated on the foremost recent activity, this may drastically impact your price.

7. Advertising the business purchasable. it's natural to think, "I'll just put an indication-up: Business available." This could be the foremost expensive mistake any business owner could ever make. When it becomes known that a business is available, the vendors, employees, and competition often react in a very negative way.

One bar dropped 30% in sales when it was rumored to be purchasable and it took 3 years to recover. When selling a business it's critical for that information to be held within the highest of confidentiality and no signs should be posted or open conversations about selling ahead of shoppers or employees to stay the worth and integrity of the business for the new owner.

8. Improper allocation of price. When selling a business multiple items are being sold and also the allocation of price greatly affects the number of taxes the owner pays. Not using an accountant that focuses on business sales can cost a business owner overpaid taxes.

Although selling a business yourself might sound just like the easy option, within the long-term it'll cost you rather more time and money than you hiring an expert that sells businesses.