4 Potential Issues When Selling A Business

Outlined below are a few unexpected aspects of the business sale process that can sometimes impact the turnaround time of a sale. You need to understand these potential issues when selling a business so that you will be better prepared to circumvent them.

1. Is Time on Your Side?

Use an intermediary to assist with the filtering of prospects vs. “suspects”. Sellers are typically unaware of the time and documentation needed to assemble the required Offering Memorandum. The seller must provide the completed memorandum to both the intermediary and potential buyer for review and propose meetings and pricing. Owners are faced with the challenge of keeping their business thriving during this time.

2. Are You Trying to Do Too Much?

When a company owner is also its founder, that individual is typically used to making all of the decisions. That’s why business owners in the midst of selling will soon find themselves challenged with the desire to fully be a part of both the running the business and the selling process. Delegation to someone else can be truly invaluable. Think of your top people as extremely valuable resources. They may have first-hand knowledge regarding additional concerns such as competition and potentially interested acquirers. It can be tremendously beneficial to bring in a trusted employee to be part of the sales process.

3. Delays Due to Stockholders

When mid-sized, privately held companies are supported by minority stockholders, these individuals must be included in the selling process—however small their share may be. The business owner will need to obtain their approval to sell. The sale price and terms will be the influencers in obtaining their approval. Issues such as pricing disagreements, competing interests, and inter-family concerns may cause conflict and further delay the process.

4. Money Issues

It is sometimes difficult for a seller to accept or even consider anything else, once they decide upon a price. After all, a business owner likely created the company and may have a strong emotional attachment.

Another factor that often interferes with a successful sale occurs when sellers instantly turn down offers because they don’t meet with their desired asking price.

That’s when the intermediary can often come in to salvage the deal. A business broker can serve as a negotiator and can work out a deal that is structured in a manner that works for both sides.

Copyright: Business Brokerage Press, Inc.


Like this article?

Share on Facebook
Share on Twitter
Share on Linkdin
Share on Pinterest

Leave a comment

Translate »