Q: I am a business owner who is considering selling my company. What are some of the most typical blunders people make when selling a business?

A: A successful sale requires planning and strategizing, as well as attention and commitment. If you're thinking of selling, be sure you don't:

1. Under or overestimate the value of your company - According to Aldwin Callen Advisors, organizations rarely have a current or correct business appraisal, and an owner's asking price is frequently excessively high or low. Buyers are more concerned about current performance. Future growth is important to sellers. It is critical to locate comparable industry sales.

   Also, don't assume that purchasers will be willing to pay the price you believe your company is worth. Be as objective as possible when determining a pricing. It is sometimes appropriate not to set a price.

2. Buyer motivation is frequently misunderstood - Buyers rarely buy what merchants believe they are selling. Sellers may overestimate the importance of numbers while their purchasers are seeking for intangible assets such as reputation, brand, intellectual property, and management abilities. Buyers are also frequently on the lookout for opportunities for improvement. You can increase your company's perceived value by identifying areas that could benefit from the buyer's stronger financial or human resources.

3. When working with purchasers, keep financial and operational information discreet until you're satisfied the transaction will close effectively.

4. Ignore preparing financial statements – Buyers expect organized and reliable financial statements while conducting due diligence on acquisition targets. Many small and medium-sized enterprises do not adhere to GAAP accounting standards. Some companies keep their records on a cash basis, while others include non-operating expenses and other charges to minimize their taxable revenue. Businesses must maintain a dependable set of financial statements that accurately reflect the company's trends and profitability. This frequently entails engaging a valuation professional to prepare pro-forma (normalized) financial statements that account for mismatches between income and expenses as well as non-operating factors. Furthermore, it is critical for businesses to create financial predictions for the following three to five years to aid the buyer in understanding the business's development and profitability potential.

5. Mention the cost first – A cardinal rule of negotiating is to never be the first person at the table to bring up the subject of pricing. Value is subjective, and an experienced buyer who sees your company's potential may be willing to pay a greater price.

6. Forget to plan for your personal financial and estate needs after the sale of your firm – Many business owners fail to plan for their own financial and estate needs after the sale of their company. Discuss your income needs with a financial advisor if you are retiring from the workforce.