After working with dozens of Metro Detroit business owners planning their exits, these are the ten mistakes I see most often. Every one of them is avoidable with proper planning.
Waiting Until You HAVE to Sell
Health scares, burnout, partnership disputes, and market downturns force owners to sell from a position of weakness. Buyers sense desperation and adjust their offers accordingly. Owners who sell on their timeline get 20-40% more than those who sell under pressure.
Estimated cost: 20-40% of business value
Not Knowing What Your Business Is Worth
Without a data-driven valuation, you're either pricing too high (which scares away buyers and creates market fatigue) or too low (which leaves money on the table). According to the IBBA, 50% of sellers have unrealistic price expectations at the start.
Estimated cost: 15-25% over/under-pricing
Being Too Dependent on Yourself
If customers call you directly, if you make every decision, and if the business would struggle without you for 90 days, buyers will discount the price by 30-50%. Building a management team is the single highest-ROI pre-sale investment.
Estimated cost: 30-50% valuation discount
Customer Concentration
Having any single customer above 15-20% of revenue is the #1 deal killer. Buyers see existential risk: what if that customer leaves? IBBA data shows concentrated businesses take 40% longer to sell and close at 15-25% lower multiples.
Estimated cost: 15-25% lower multiple + longer time to sell
Messy or Unreconciled Financials
Personal expenses mixed with business expenses, cash transactions not recorded, add-backs not documented. Every ambiguity in your financials gives buyers ammunition to negotiate a lower price or retrade during due diligence.
Estimated cost: 10-20% in negotiations + deal risk
Selling Without Professional Advisors
Trying to sell without an experienced attorney, CPA, and advisor is like representing yourself in court. You don't know what you don't know. An advisor team typically costs $50K-$100K but saves or earns 3-5x that amount through better deal terms.
Estimated cost: $150K-$500K in suboptimal terms
Accepting the First Offer Without Creating Competition
A single buyer has all the leverage. Multiple interested buyers create competitive tension that drives prices up. Even if you strongly prefer one buyer, having alternatives strengthens your negotiating position on price, terms, and contingencies.
Estimated cost: 10-20% lower price
Ignoring Deal Structure
A $3M offer with $1M at close and a 2-year earnout is not a $3M deal. Focus on cash at close, seller financing terms, earnout conditions, escrow holdbacks, and contingencies. The headline price is marketing; the structure is reality.
Estimated cost: 25-40% gap between headline and real value
Neglecting Confidentiality
When employees, customers, or competitors learn about a potential sale before it closes, the consequences can be severe: key employees resign, customers diversify away, competitors poach accounts, and suppliers tighten terms.
Estimated cost: Deal collapse or 10-30% value destruction
Not Planning for Life After the Sale
Many owners discover post-sale that they didn't plan for taxes (which can consume 25-40% of proceeds), retirement income needs, healthcare costs, or simply what to do with their time. Post-sale regret is common when the emotional and financial planning is incomplete.
Estimated cost: Emotional regret + tax surprises of $200K+
"The best time to start avoiding these mistakes is 2-3 years before you plan to sell. The second best time is right now."
-- Matt Sitek, Founder, FuturePath Ventures
Selling Mistakes FAQ
What is the single most expensive mistake owners make when selling?+
Going to market without proper preparation. The Exit Planning Institute found that businesses with formal exit preparation sell for 50-100% more than unprepared businesses. For a $2M business, that's $1M-$2M in lost value. No other single factor has a larger impact on your final price.
How far in advance should I start preparing to sell?+
Ideally 2-3 years, though 12-18 months of focused preparation can still make a significant difference. The preparation period lets you clean financials, reduce owner dependence, diversify customers, and build systems that justify a higher multiple.
Should I tell my employees I am planning to sell?+
Not initially. Most advisors recommend keeping the sale confidential until a Letter of Intent is signed. At that point, selectively telling key employees (with appropriate incentives to stay) is wise. Broad employee disclosure too early can cause panic, resignations, and productivity drops.
Is it a mistake to accept the first offer?+
Almost always. The first offer is a starting point, not an endpoint. Even if it's a strong offer, having competing interest creates leverage. Smart sellers generate 2-3 qualified offers and compare not just price, but deal structure, contingencies, and post-sale terms.
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