Selling a business takes work and careful preparation — if you want to do it successfully. For first-timers, I advise a comprehensive checklist (ideally under the guidance of a professional and experienced M&A specialist / business broker) that lists all the documentation being taking into consideration, as well as the needs and wants of a prospective buyer. Why? This info could directly impact the chances of your business being sold, and for how much.

At the outset, you need to realize that the process will take is not easy, and will require a significant amount of your own time. These are both serious commitments. If you do have the time and are ready to make that kind of time investment, here are four big mistakes to avoid:

1. Using inaccurate or incomplete documentation. One of the most important first steps you must take is the creation of a document that is typically called the Confidential Business Review (CBR) or Offering Memorandum (OM). Your broker will prepare this for you with your help, and will then provide the document to potential buyers (after they have signed a confidentiality agreement). It is absolutely vital that the data in your CBR is 100 percent accurate. Deals fall apart at the 11th hour all too often because of expectations buyers have based on inaccurate or incomplete documentation provided by the seller. Don’t blow your deal up by estimating or guessing, accuracy is a must.

2. Not knowing what your business is worth before you go to market. This is a critical mistake many business owners make. Owners have a tendency to over-value their businesses. Before you go to market, at least have a ball park figure of what it might be worth. Most Brokers with transactional experience will offer you a “Broker Opinion of Value” (not an official appraisal) or you can get a formal business appraisal which might cost several thousand dollars. Depending on the size of the business, and the industry, it might be worth the expense as it can be used as a negotiating tool with a buyer.

3. Sharing your company’s confidential information. As mentioned earlier, do not expose your company’s intimate secrets until you have a signed, sealed and delivered Non-Disclosure Agreement (NDA) signed by the potential buyer. Make sure your Broker has a good NDA and will get financial information on any potential buyer.

4. Not fully understanding the intangible assets of your company. Too often, I encounter business owners who have been so closely involved with running their companies that they don’t really see the value of their intangible, off-balance assets to specific buyers. Quite often, sellers don’t understand what the buyer is actually interested in, and they often miss showcasing the whole kit and caboodle and focus only on a portion of it. I don’t want this to happen to you. After doing a detailed analysis of your company, list all of your firm’s strengths, unique features and competitive abilities, so that you can fully appreciate what makes your company successful. Remember, sellers rarely understand what the buyer is really buying. Make sure you leave all your chips on the table.

This is just a brief list of pitfalls to avoid, and I certainly haven’t listed them all here. I suggest you contact a profession M&A specialist or business broker Los Angeles to help you through the process. Do you do that with your health? Do you do that with your child’s education? Do you do that with your investments? Probably not — and you don’t because you realize you need expert advice and help. Likewise, if you are contemplating the sale of your company; it is far wiser to consult with professionals. However, to avoid the pitfalls discussed above and the dozens of others that can kill a successful sales transaction, contract a professional to assist you. Please contact my company so that we can help you learn more about this process and how you can obtain the most profit with the sale of your company.

Empire Business Solutions, a leading independent business brokers Los Angeles and Orange County, California is pleased to announce the company has signed an exclusive right to sell Engagement letter with a local company to bring it to market.

Contact Roy Moss, President of Empire Business Solutions at 714-374-6430 to discuss the process in selling or buying a business for sale in Orange County, California. Empire has been in business since 2005 and is considered a leading California business broker with offices in Orange County and Los Angeles with primary emphasis on businesses in the $1.0 mil-$10.0 mil revenue range.