If you are an owner of a turnkey business, there can come a time where you might consider selling your company. While this exit may not come easily, it can help to stay focused on the key aspects to focus on while making this transition. It is surprising to many business owners with regards to how difficult it can be to have their turnkey business for sale for a good price and a reasonable timeframe. However, it is important to not let frustration get in the way of maximizing your selling price including the process. The majority of these frustrations can be avoided by being aware of the common pitfalls that business owners face and avoiding them. Let us have a look at some of the most common pitfalls.
7 Things To Avoid While Selling Your Turnkey Business
Here are the top 7 things that you should avoid while selling your turnkey business. Let us have a look at each one of them.
1. Insufficient Preparation
Having your turnkey business for sale is not all about letting potential buyers know about the availability of the sale. It is important to stay prepared beforehand and address important aspects such as lease issues, staffing conditions, financial documentation, sustainable profitability, and several others. Another aspect to consider is the time during which this preparation has to happen. It is always best to start as early as possible.
2. Taking a Hands-Off Approach
Most often, business owners tend to think that hiring a broker is all that it takes when it comes to putting up turnkey business for sale. But, that leads to the business owner most often being disengaged from the entire process. This could further lead to poor quality of sales. Although your broker might help market your business across different channels, they may not be as motivated as you to put the turnkey business for sale at the most attractive price with the best terms.
3. Failing To Pre-Qualify Buyers
An important aspect when it comes to having turnkey business for sale is to pre-qualify the prospective buyers. This is very crucial for businesses to have a successful sale. Usually, sellers avoid pre-qualifying prospective buyers as their primary concern is to attract buyers in the first place. More importantly, pre-qualification provides the opportunity to protect sensitive information about your turnkey business for sale and avoid this information from being misused.
4. Pricing The Business Inaccurately
Most often, inexperienced sellers have a tendency to price the business inaccurately that can ultimately lead to several incomplete deals. It is important to get your financial documents in place to make sure that your price is reasonable and you value your business right. It is also key to conduct a thoughtful valuation process before setting a particular asking price for the business. This asking price should closely align with the prices of the marketplace for the turnkey business.
5. Unwillingness to Leverage Professionals
It is natural for business owners to have the expertise to run a business and ensure that it stays profitable in the market despite having several competitors. However, when it comes to having turkey businesses for sale, it is important to understand that certain aspects such as financial documentation, legal compliance, and others require professionals who can provide the right information and guidance. Most business owners tend to face resistance when it comes to hiring professionals. However, it is important to include them in this cycle of a sale as it can be extremely beneficial. So, ensure to leverage the expertise that can be offered by professionals to help you value your business right and sell the business under the right terms and the right price.
6. Breaching Confidentiality
Confidentiality is one of the main pillars that hold business relationships and customer relationships together. It is important to maintain confidentiality and not break them under any circumstances. Many business owners tend to focus on selling the business thereby affecting the sales process, For instance, if the word gets out that your turnkey business is up for sale, it could adversely affect your sales and the relationship with your staff as well.
7. Only Accepting All-Cash Offers
In the current age, expecting all-cash offers may not be the best route to take. This can be detrimental to business owners from a tax perspective as well. Instead, it can be helpful to consider other alternatives such as seller financing, third-party financing, deferred payments, and others.
In a Nutshell
While selling a business can be exciting and involves several aspects, it is also important to understand the pitfalls that most business owners come across that could result in an unsuccessful selling process. By staying aware of these pitfalls, you can make sure that you avoid them in advance and reduce the likelihood of errors and unforeseeable circumstances that may arise while selling your turnkey business.
