5 Common Mistakes to Avoid When Selling Your Business

Overvaluing your business can scare away serious buyers, while undervaluing it means leaving money on the table. It is crucial to get a realistic valuation based on financials, market conditions, and industry multiples. Use tools like our valuation calculator as a starting point, but consider professional advice for a formal sale.

Buyers will perform due diligence, and clean, organized financial statements are non-negotiable. Messy books are a major red flag that can kill a deal instantly. Ensure your profit and loss statements, balance sheets, and cash flow statements are accurate and up-to-date for at least the last three years.

Selling a business isn't just about the final handshake; it involves a transition. Buyers need to know the business can run without you. Document your processes, have a strong management team in place, and be prepared to offer a transition period to ensure a smooth handover.

Focusing only on the final price is a mistake. The deal structure—how and when you get paid—is just as important. Understand terms like earn-outs, seller financing, and stock-vs-asset sales. An experienced M&A advisor can be invaluable here.

Announcing your intent to sell too early can cause panic among employees, customers, and suppliers, potentially harming your business operations and value before a deal is even close. Use a platform that prioritizes confidentiality and only reveal details to vetted, serious buyers under a Non-Disclosure Agreement (NDA).