Avoid These Costly Mistakes in the Business Sales Process – Post #21

If you are in the building phase of your business’s life cycle, you may feel like you’re running a marathon. The maximizing of its value takes years. But friends, selling a business can happen within a couple of weeks or months. If you don’t slow things down, mistakes in the business sales process could cost you hundreds of thousands or even millions of dollars. And of course, there are no redos after all is said and done. We’ll discuss common issues that could potentially cost you during at this time. 

Podcast Time Index for “There are No Mulligans When You Sell Your Business”

00:37 – There are no mulligans in the sales process
00:43 – Teeing off
03:57 – No mulligans in Business
05:49 – Most know how to run a Business, few know how to sell one
06:40 – Personal Restraint
07:47 – Are you ready?
10:16 – Assemble the Team
14:31 – Build the Plan
15:55 – Don’t make rookie errors
16:40 – Rookie errors to be aware of
20:38 – Remember, there are no mulligans

Amateur Golfing

As part of my Turf Grass Management degree courses at Abraham Baldwin Agricultural College in South Georgia, I was able to play a ton of golf. I’ve played at all the Sea Island courses, at Augusta National, and even at TPC Saw Grass the week after a pro tour went through the course. As much as I would try to play like Tiger Woods, I’d inevitably have to say, “Let me use my Mulligan on that one.”

I can remember taking four or five Mulligans, or do-overs, per nine holes while other players would allow themselves one Mulligan per 18 holes. I used the “right” clubs, I stood with my feet the “right” way, and I had the “right” grip, but I never achieved professional status. I made so many mistakes so frequently that I eventually decided golf wasn’t worth the effort.

There Are No Redos in the Business Sale

I never had to use a Mulligan in a do-or-die situation that could cost me millions of dollars of prize money. Personal restraint on the golf course was not required because I had nothing to lose. So, I used Mulligans like golfers drank water on muggy Georgia days.

But friends, there are no redos at this point in the game. You don’t get a Mulligan. The single hardest thing you will face at the time of the business sale is personal restraint. However, moving too quickly or acting based on emotions may cause you to make irrational decisions that become permanent disasters and mistakes in the business sales process.

Emotional Investment

The buyer is not personally invested in your business’s exit and valuation, but you are. Come sales time, you’ve put years of blood, sweat, and tears into building your business’s value. The majority of your personal worth is most likely tied up in the company. Thus, selling it will be hard, scary, and emotionally exhausting. You don’t want the buyer to interpret your up and down emotions as weakness, though. Demonstrating a halfhearted attempt to sell your company at your asking price could prove devastating. If you’ve assessed your minimum business sales price, you need to stay strong and fight for the price you need.

Go All-In When You Receive an Offer

Once you receive a buyer’s offer, you can do several things to exude an air of confidence you may not feel. You don’t want to walk into a sale with weak knees and ask for a Mulligan after you fall on your face. So what can you do to ensure a successful sale happens?

1. Have courage. – Pull yourself up by the bootstraps, and man up! The minute you decide to sell, jump in or stay out.
2. Assemble an advisory team. – Now is the time to bring in your core team: the attorney, the Certified Public Accountant, and the CERTIFIED FINANCIAL PLANNER™. Add a Certified Exit Planning Advisor, and your well-rounded team will help you stay strong and vigilant during the sales process.
3. Build the Exit Plan. – Choose one of your four professional players to oversee the sales process with precision. Designate a Chief Operating Exit Planning Officer to orchestrate the players, call the game shots, and bring in special teams.

Avoid Rookie Mistakes in the Business Sales Process

As you prepare to show a strong, united front in the face of your potential buyer, you don’t want to make rookie mistakes.

1. Don’t stop working on your business.
2. Don’t take any offer just because it’s the first offer.
3. Reign in your eagerness to sell.
4. Don’t quit in the middle.

So I reach this point. Congratulations! It’s time to sell your business! Or, congratulations; you just received an offer! Friends, selling a business is hard. The fittest person in a competition typically wins. When a buyer comes in, he’s going to try to wear you down to get you to cut your sales price or change your terms. Just stay diligent. When your stamina wavers, depend on your advisory team to stay strong during negotiations.

Most of all, remember that you don’t get to mess up now and call a Mulligan. If you make mistakes in the business sales process, you could end up losing hundreds of thousands if not millions of dollars. You could end up never selling the business. Or even worse, you don’t sell the company for enough and then have to work for free for years after. Yeah, there are a lot of dangers here, friends. So whenever you enter the sales process, jump in wholeheartedly and follow some of the helpful points above. And have a business broker or other sales facilitator by your side… the topic of our next article.

I know, guys. Life is hard. The sales process can be a bear. It doesn’t have to be. Let’s continue to make our lives, at least, financially simple.