Selling Your Business? Avoid These Common Mistakes

According to the Harvard Business Review, around 70 to 90% of businesses fail to make a successful merger and acquisition.

While many factors are driving this high rate such that it is impossible to pinpoint the one reason behind the failure, there are common mistakes that derail the process and ultimately cause the business purchasing and merger to fail.

As business brokers in Roswell, Georgia at Century Mergers & Acquisitions, we have seen these mistakes get repeated over and over again.

To help you, we are listing some of the most common mistakes in the run-up business transactions of your M&A so you can avoid them yourself. These include:

• Not knowing what your state and local taxes are
  Your business’ tax status is one of the first factors that your prospective buyer will look into. Not being able to present your status definitively can discourage them from pushing through as this signals potential unknown liabilities.
• Unsustainable quality of earnings
  While having good EBITDA or earnings before interest, taxes, depreciation, and amortization performance is always valuable, a prospective buyer will want to know what is driving this. Since they are essentially buying your business’ ability to produce a good future cash flow, they would also want to ensure that the components causing this is sustainable.
• Lacking or unclear employment agreements
  Are your employees well-treated and well-compensated? It is crucial to look into the specifics of your organization’s legal relationship with them. Failing to ensure their benefits, 401(k) eligibility, and options allocations, among others, can result in future lawsuits and expenses, something that no buyer will want to be responsible for.

Avoid these common mistakes when you work with our brokers and experts in mergers and acquisitions (M&A) and real estate in Georgia. To be another one of our successful business transaction stories today, give us a call.