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Pitfalls to Avoid
A survey by Braxton Associates, a division of Deloitte
& Touche, found that Fortune 1000 companies generally achieved
less than a 30 percent success rate in their mergers and
acquisitions. Help ensure the smooth sale of your business
by avoiding these potential mistakes.
Don't sell from a position of weakness.
A good time to sell can be when your business is growing
and has strong prospects. If profits peak or the outlook
dims, the buyer may have an advantage.
Don't underestimate the value of your business.
Occasionally, business owners reduce paper profits to help
lower taxes, but this "bottom line" might not reflect the
real value of the business.
Don't overprice your business.
Smart buyers know roughly what a business should sell for,
and overpricing your company to leave "haggle room" can
eliminate the best prospects. Start at a reasonable level
where the buyer can justify the selling price.
Don't sell to the wrong buyer.
Ascertain to the best of your ability that the potential
buyer is capable of running your business successfully -
especially if your sales agreement stipulates future payments.
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