June 13, 2023

Are you a business owner who has decided to take the plunge of selling your business?

Congratulations on reaching this significant milestone! Selling your business can be an exhilarating yet daunting endeavor. It’s a journey that requires careful planning, strategic decision-making, and avoiding common pitfalls along the way.

Especially if you have spent years, maybe decades building your business and the proceeds are earmarked for your retirement.

In this blog post, we will delve into the top mistakes that business owners often make when preparing their business for sale. By being aware of these potential missteps, you can proactively address them and maximize the value of your business. Whether you’re a seasoned entrepreneur or a first-time seller, this guide will equip you with valuable insights to navigate the sale process successfully.

Mistake #1: Neglecting to Prepare Accurate Financial Statements

This is not a situation where you can drop the “trust me” or the real numbers are much better “wink, wink” we just didn’t want to pay the taxes.  Looking at this from the buyers point of view, this really increases potential risks.

Solid Financial statements are the heart of your business; they provide potential buyers with a snapshot of your business’s financial health. One common mistake sellers make is neglecting to prepare thorough and accurate financial statements. This oversight can create suspicion or doubt in the mind of the potential buyer. Remember, transparency is key to building trust and confidence.

To avoid this mistake, ensure that you present clean, audited financial statements for at least the past three to five years. It should include income statements, balance sheets, and cash flow statements, detailing your business’s financial performance. Be prepared to explain any significant fluctuations or anomalies in these statements.

Failing to Optimize Business Performance Before the Sale

Mistake #2: Failing to Optimize Business Performance Before the Sale

When it comes to selling your business, one crucial mistake to avoid is neglecting to optimize its performance before putting it on the market. Think of it as embarking on a treasure hunt without a map to guide you. Fortunately, there is a program designed to help you uncover the hidden riches within your business: The Business Value Amplifier.

Business Value Amplifier

The Business Value Amplifier is a comprehensive 10-week program that aims to maximize the value of your business. It goes beyond the surface level of increasing profits and dives deep into identifying untapped resources and enhancing your business’s overall worth. By participating in this program, you’ll gain valuable insights and practical strategies to optimize your business’s performance and make it more attractive to potential buyers.

One of the key benefits of the Business Value Amplifier is its ability to help you spot the hidden opportunities within your business. Just like a treasure map, this program provides you with a roadmap to navigate through various aspects of your business and identify areas where you can unlock additional value. By exploring hands-on exercises and learning from industry experts, you’ll gain a deeper understanding of how to leverage your business’s strengths and address any weaknesses.

Mistake #3: Not Engaging an Experienced Advisor Team

The process of selling a business is complex and fraught with potential pitfalls. One common mistake is attempting to navigate this process without the guidance of an experienced advisor. Advisors can provide invaluable assistance, from accurately valuing your business and marketing it to potential buyers, to navigating negotiations and legalities.

These advisors may not be on your current team.  For example, if you utilize an accountant to prepare your corporate taxes only, I think of them as a transactional accountant.  Which be exactly what you needed up to this point.  Now you need a strategic accountant.  One who has been involved in the type of sale you are working on numerous times.  In fact, a lot of the times they may be able to bring a buyer to the table.  You will also want a good lawyer and good financial planner on your team.  Often times the financial planner is informed of after the fact, but they should be an integral part of the team as they can ensure that the right products/structures are entertained and put in place at the right time.

Mistake #4: Unrealistic Business Valuation

Most people have seen Shark Tank or Dragon’s Den and have seen what happens when the person seeking an investment over rvalues their company.  Don’t fall into that trap.  Assigning a realistic and accurate value to your business can be one of the most challenging aspects of the sale process. Overvaluing your business can scare off potential buyers, while undervaluing it could result in financial loss.

To avoid this mistake, enlist the services of a professional appraiser. They can provide an objective, thorough business valuation considering factors such as market conditions, industry trends, business performance, and assets. This will not only help you set a realistic asking price but also provide a solid footing in price negotiations.

Mistake #5: Starting the work too late

It is really never too early to begin contemplating a change of ownership in your business.  If you are always thinking about the possibility of a sale, the decisions you make along the way can make your business more saleable or less.  Keeping this in mind can help guide the options you choose.

However, you can start too late.  Sometimes the things that should be implemented to save on taxes require time to not only set up, but may be also need to be in place for a certain period of time to be used.  By starting early, you may be able to ensure that more money ends up in your pocket and not in the tax mans.

Want to educate yourself further on how to make your business more saleable?  Check out the Business Value Amplifer course that can take you from unaware to confident about your plans.
www.blackstarwealth.com/bva.  The next cohort starts soon.

Join the From Bottleneck to Breakthrough Entrepreneurial Challenge

We will walk you through exactly how my clients have increased the value of their business and revenue so that they can spend more of it performing in their genius zone, make more money and build a more valuable company. 

Starting on May 6-10 at 11 AM ET daily:

Day 1: Design Your Ideal Day

Day 2: Unlock Your Genius

Day 3: Master Letting Go

Day 4: Leverage Your Time Blueprint

Day 5: Build Momentum

Wendy Brookhouse

Wendy Brookhouse


Wendy has been getting people to their financial goals faster and easier than before for over a decade. She has known what it’s like to control cash flow from childhood, where her first job was raking blueberries for ten cents a pound.