Every business owner has to transition out of ownership at some time. In an Inc. article titled, “Four Mistakes That Could Lower Your Business’s Value and Weaken Its Salability”, author Bob House explores four mistakes that could influence a business sale.
In his article, House writes that it is important for the seller to have “a selling mindset”. This mindset is important for a business owner. When operating this way, sellers are essentially forced to stay on their toes.
House writes, “a selling mindset encourages continual innovation, growth, and investment, helping your business stay ahead of the competition and at the top of its potential.” Having a “selling mindset” means that business owners have no choice but to perform periodic reality checks. They will have to assess the strengths and weaknesses of their business.
Mistake #1: Poor Record Keeping
For House, poor record keeping is the biggest mistake that business owners need to address. Both potential buyers and business brokers will want to examine your books. They will want to look at your books for the last few years. Before anyone buys your business, they will look very closely at your financials.
Mistake #2: Failure To Innovate
House thinks that a lack of tech savvy could make your business less attractive to prospective buyers. Virtually every business is now impacted in some way by its online presence. According to House, a failure to maintain an active online presence could be associated with a failure to innovate. Even if your company is innovative, prospective buyers could portray your company in a negative light. House feels that it is important to maintain a robust online presence.
Mistake #3: Unstable Workforce
House feels that having an unstable workforce could impact your business’s value and its salability. A lot of employee turnover will have a negative impact on prospective buyers. Keeping great employees could make the difference when it comes time to sell your business.
Mistake #4: Delayed Investments
Delaying investments and improvements is the final factor that House notes as a potential issue. It is important for owners to continue to invest in their business. Investing in your business can help it expand, grow and showcase its potential future growth.
An excellent way to prevent making these mistakes is to hire EBIT Associates. We know what mistakes you should avoid when selling your business. EBIT can help you preserve the value of your business.