Selling a business is no easy endeavor. A ton of work is needed to successfully prepare, list, and promote a business. A plethora of transactions and documentation is required to adequately inform potential buyers, record the sale, pay all involved parties, and more. It’s easy to see how a business owner with no prior knowledge of how to complete these tasks could get overwhelmed quickly.
However, not doing these things correctly can get you into some serious legal trouble. These mistakes are costly, suck up valuable time, and take away from the seller’s credibility.
All potential legal mistakes by business sellers result from poor preparation. So, it is crucial to adequately research how business sales must occur in your area to ensure everything is done according to the law. If you do not sufficiently prepare, you may fall victim to one of these common legal mistakes made by business sellers:
- Not Using Professional Services
If you do the required research into how to successfully sell your business, you will quickly realize that it is a monumental task, especially for businesses that sell for $2+ million. Using qualified professionals to assist in your business sale, including a broker, real estate agent, banker, attorneys, and more, is essential. Try to handle it all yourself and you’re on a direct path to trouble.
- Not Prioritizing Privacy
Privacy is paramount in all aspects of a business sale. Letting it be known publicly that you are selling your business can have negative effects on your sales and public image. Not protecting potential buyers’ privacy can end a sale quickly. A professional broker will know how to list and promote your business for sale discreetly and also secure potential buyer information.
- Incorrect Valuations
The entire business deal is based on the valuation of your business, so it’s vital that you value your business correctly. Unless you just happen to be an expert in business sales and your local real estate market, chances are you don’t have the expertise to do the valuation on your own. Luckily, business brokers often have the resources and experience needed to provide an accurate valuation range.
- Lacking Engagement
Owners looking to sell might be ready to get out of the business, but potential buyers don’t typically like to see a complete disengagement from the current owner. Even if consulting with the current owner is not part of the deal, a lack of engagement can signal potential buyers to underlying issues with the business and cause them to back out of the deal. If you’re selling your business, stay active in the deal to get the best results.
- Misrepresentations
Intentional misrepresentations aren’t just unethical when selling your business… they’re 100% against the law. Even accidental misrepresentations, which are common when an owner tries to sell their business on their own, have legal consequences. You may be responsible for a long list of fees and damages that the person buying your business incurs as a result of those misrepresentations. A professional business broker will know all the questions to ask to be sure everything about your business sale is on the up and up.
If you’re ready to sell your Tampa Bay business, trust the expert team at Tampa Business Broker Inc. to get your business listed, promoted, and sold with no legal mistakes. We’ve helped countless Gulf-coast business owners sell their businesses with smooth transactions, easy interactions, and quick transfer of capital. Call us at (813) 993-4452, email us, or contact us online to discuss your business’ sale today!