Avoid common pitfalls when selling a business

Resolving any outstanding legal or environmental issues before selling a business will reassure interested parties they are making a sound investment, it has been suggested.

Associated Content's Richard Smith points out that potential buyers generally carry out background checks on businesses for sale, deeming their scepticism "only natural".

"Talk to your lawyer or other professional advisers to see what can be done about resolving any problems before selling a business," he recommends.

Harnessing the knowledge of professional brokers who are familiar with negotiating business sales is a further tip, as is ascertaining how much an enterprise's assets have depreciated before listing a business for sale.

"Potential buyers will definitely look into the market value of the business' assets [because] they will use these assets as loan collaterals," notes Smith.

He also advises taking location and owner expertise into account when selling a business, as a lower price should be expected if most of an organisation's revenue has depended on such expertise.

Firms which don't keep cash sales on their books will have a harder time selling a business, he concludes, emphasising that using a business for personal expenses will also "skew" its cash flow.


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