6 Mistakes Owners Make Selling Their Business

Thinking of selling your business? It's a big step, and it's easy to slip up. I've seen it happen a lot. I researched testimonials of 263 small businesses that recently got sold. Turns out, many owners make the same mistakes. These slip-ups can mess up your exit.

In this article, I show you the 6 most common and fatal mistakes and how to avoid them.

Ready to sell smart and move on to your next big thing? Keep reading, so you make your business sale smooth and successful.

Mistake 1: Jumping at the First Proposal

Selling your business is kind of like dating - you wouldn’t marry the first person you meet, so why sell your business to the first buyer who comes along? All first time sellers oversimplify an exit: thinking they just need to build a business, decide to sell it, and boom, it's sold. But it's always more complex: build the business, decide to sell, negotiate (and often disagree) on the first offer, restructure and prepare the business so it is exit-ready, and then finally, sell. And trust me, nearly all our clients have had a first deal fall through before they successfully sold their business.

Mistake 2: Only Getting One Offer

When you're selling, having a few offers on the table puts you in a strong position. It can even start a bidding war. This not only has the potential to bump up the final selling price, but it can also lead to better terms of sale. A good starting point is knowing the value of your venture. Here’s an instant, independent and simple tool to value your business and it’s free.

Mistake 3: Not Focusing on Profit

Profit is king, especially for smaller businesses making less than $2 million a year. Potential buyers want to know they'll get a return on their investment, and profit is the best way to show them how that is possible.

Remember the old saying:

Revenue is vanity. Profit is sanity.

In my most read Forbes article “7 Lessons That Got Me From Small Entrepreneur To Investor”, I share seven critical lessons that will guide you on your entrepreneurial path. These lessons are about breaking through earning ceilings, increasing profit and what (not) to do with that profit.

Mistake 4: Selling During a Downswing

You have more leverage to negotiate a sale when your business is growing, even if it's just a bit. Timing is everything in the selling process because you never know when a downturn might hit. Selling smart is knowing how to perfectly time your million-dollar exit and understand the signs that guide you to the perfect moment to say goodbye to your business and hello to your next adventure.

Mistake 5: Deciding to Sell When You're Burned Out

For small businesses, success often depends on the owner's passion, drive, and energy. If you decide to sell your business when you're feeling drained, the business could lose steam. The best mindset for a seller is

Happy to stay but ready to go.

Mistake 6: Thinking Your Business Isn't Sellable

There will always be doubters who say your business can't be sold for a bunch of reasons - it's too small, too reliant on you, too niche, too personal, not personal enough, etc. But the truth is, there's a potential buyer for every business out there. You might need to develop some strategies to get your business ready for a sale, like but don't rule out the idea without giving it some serious thought first. Here are 2 valuable articles if you are wondering "Can I sell a business when it’s a personal brand?” or if you are still doing most of the client work “How can I scale my services beyond me?”.

How to Take Action Now

Now that you know the top mistakes to avoid, you're one step closer to selling your business the right way. Remember, knowledge is power, especially when it comes to making big moves like this. Don't rush, think carefully about each step, and always aim for the best deal possible.

Ready to take action? Here's what you can do next:

Step 1: Assess Your Business

Take a moment to understand where your business stands today. Is it as appealing as it could be to potential buyers? If you are ready to understand what makes your business sellable and curious to discover what changes are required for your big exit, this 5-minute assessment is for you. It will provide you with an exit-readiness score and you’ll receive 3 actionable tips too.

Step 2: Seek Expert Guidance

Don't go at it alone. Expert advice can make a world of difference in preparing for a sale. Specialists and business owners who’ve done it before are here to support you every step of the way. This “How to sell your small business” guide contains key steps to prepare your service-based business for a successful sale. At The Big Exit Community, we’re creating the world’s most strategic network of small business owners -looking to sell in the next 3 to 5 years -and creating connections to your buyer, investor, and fellow owner to last a lifetime.

Step 3: Implement Strategic Changes

If you want to take this one step further, educate yourself on what makes a business sellable, by buying the Small Business Selling Course and learn everything you need to sell your business – from getting your business exit-ready, to multiplying its value and from finding buyers, to your life after selling.