14 Most Common Mistakes in Share Sales by Company Owners
Selling a company is often a challenging and time-consuming process. This process requires detailed planning, preparation, and experience. During this process, business owners can make several mistakes. We have compiled some of these mistakes for you. The list below aims to share the most commonly encountered errors.
1. Entering the process without sufficiently preparing the business for sale.
2. Failing to design a competitive process and relying on a single buyer.
3. Failing to ensure the confidentiality of the process with a non-disclosure agreement.
4. Failing to establish the necessary infrastructure for detailed due diligence.
5. Not working with an experienced advisor and trying to manage the process alone.
6. Setting expectations incorrectly by relying on an inaccurate company valuation report.
7. Having irregular company financials, resulting in negative buyer motivation.
8. Failing to clarify the key terms and critical issues in the Letter of Intent.
9. Misjudging the offer and signing an agreement with unfavorable terms.
10. Neglecting the tax and legal implications in the closing agreements.
11. Neglecting the day-to-day operations of the business during the sale process.
12. Failing to consider the arrangements concerning executives and ensuring team continuity.
13. Failing to make accurate growth, investment, and profitability forecasts.
14. Failing to structure performance-based compensation correctly.
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