Owners selling a business online often believe that because they've run their companies successfully, they'll have no trouble advertising on the Internet, finding a good buyer and closing a deal. That's not necessarily the case. Many smart business owners have difficulty completing a successful sale because they make one or more of six common mistakes. This is what to avoid:
1. Providing too little information: Most entrepreneurs offering their companies for sale know it's important to provide enough information so prospective buyers can determine if the offering is of interest. But there is a danger in providing too little details about the business. The best strategy is to explain enough to potential buyers so they can get most of the facts about the business being sold without going onto the next ad because your listing didn't have enough information to keep them interested.
2. Being hard to reach: A surprisingly common problem is not making it easy for an interested person to get a hold of the owner posting his business for sale ad on the Internet. Buyers won't try to reach you forever. They'll get impatient with the continued back and forth voice mail messages used in an effort to communicate, and will go on to investigate other offerings. Offer a couple of different ways to contact you.
3. Revealing the company’s identity: For most people engaged in selling a business online, it’s very important that certain individuals, such as employees, customers and vendors, don’t find out exactly which company is being offered. It's best that the seller set up a phone number and email address that have been established solely for people interested in responding to the offering. Don't use your home or mobile number. Those are clues someone can use to find out what company is being advertised.
4. Failing to distinguish between real buyers and people who will waste the seller's time. That's one of the biggest problems experienced by owners of small and mid-sized businesses looking for someone to buy them out. They lose time, energy and momentum working with people who haven’t the interest or the money to complete a deal. A time waster is anyone unwilling to provide a financial statement, resume, and letter of recommendation from his banker or a respected member of the business community. And someone unwilling to start the introduction process by signing a non-disclosure business. For every ten responses to a business for sale ad, usually only one or two of the people are possible buyers. Those are the ones to focus on, while saying "thanks, but no thanks" to the others.
5. Not having important information about the company ready: And once a qualified and serious buyer is identified it’s critical that needed information is immediately available. That will include financial data--balance sheets and P & L statements going back three to five years--an asset list, copy of equipment and premises leases and related documents. One of the easiest ways to lose a good buyer is not being prepared to provide her the information needed.
6. Neglect to rely on professionals when appropriate: While it isn't necessary to have an attorney or accountant available when a business is being introduced to prospects, it's often a mistake not to call on them when their services are needed. Sellers don't always understand that the best way to communicate with the buyer's due diligence experts is by having the company accountant available to answer their questions. And it's almost always a mistake for a seller to enter into a sales contract or attempt complying with bulk sales regulations without assistance from a lawyer and escrow holder.
Selling a business online can be the right strategy for an owner ready to retire. But it’s critical that he avoid some of the common seller mistakes if he wants to be successful.
About the Author: Peter Siegel, MBA is the Founder of www.BizBen.com (established 1994 - 7000+ California businesses for sale, 200 new listings daily) and the Director of the BizBen Network (16,000 business buyers, 4,000 small business owners, 1,800 California business brokers & agents). Peter Siegel can be reached direct at 866-270-6278.
Posted on June 21, 2011 | 
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