The first and worst mistake is not developing an exit strategy long before you need one. Waiting until you have to sell is not a sound exit strategy, but, unfortunately, is the one used by too many business owners.
Once a business owner decides to sell, he or she must be proactive, not reactive. Selling a business is not like waiting for a Publisher's Clearing House to knock on the door and hand over a big check. That's why it pays to build the exit strategy long before it's needed.
It's also important to consider all options. An outright sale is obviously the most common. However, other options may involce a sale to management, an ESOP, a recapitalization, and intra-family sale, etc.
As part of the exit planning strategy, knowing what the company is worth is critical. Ideally, this should be evaluated every year. Only by knowing the value of the business can business owners decide if the value coincides with their "exit" requirements.
A professional business intermediary can assist in the process. Keep in mind that market conditions greatly impact value.
Many business owners place their business up for sale and only then, for the first time, give thought to what they are going to do if it sells. This often results in panic as they consider what they will do and how they will finance it. Many actually abort a pending sale or withdraw it from sale. This thought process about what life will look like "post-sale" should be done long before considering selling.
Another mistake is failing to take advantage of the outside professionals that are available. Attempting to be a sole practitioner in the selling process is a big mistake. Make sure these outside professionals have transaction experience. Starting with a professional business intermediary is a good start.
