A graduate of the Kelley School of Business at Indiana University, Matthew Brunstrum has been working in the finance field for more than 5 years. Matthew Brunstrum serves as a mergers and acquisitions advisor at Sun Acquisitions in Chicago, Illinois, and is responsible for providing a range of M&A services to clients that help them with buying and selling lower middle market businesses.
While the economic climate, credit market, and other external factors do affect whether a business sale succeeds, there are also several internal behaviors that business owners must avoid to ensure transactions go well. Some of the sales mistakes owners should avoid include:
Misunderstanding the Value of a Company
Most business owners have a number in mind when they plan on selling their companies. Unfortunately, this number is not always representative of the company’s true value. Before setting a selling price, owners must create a range of realistic values for their businesses.
Unwilling to Hire Professionals
When it comes to running their businesses, owners are likely the experts. But this experience doesn’t translate to selling their companies. Owners must be willing to hire the professionals they need during the process, such as a business broker, lawyer, or M&A consultant.
Wasting Time on Bad Buyers
Some business owners think that the best buyers for their companies are customers, suppliers, competitors, or friends. However, these individuals aren’t always financially qualified to take on the businesses, or even interested in becoming owners. Instead of wasting their time pushing sales on uninterested or poorly matched parties, owners should focus on serious buyers only.
Openly selling a company can be detrimental to its operations by decreasing sales or damaging customer relationships. To avoid this, owners must make a conscious effort to keeping the sale of their companies quiet until the deals are completed.