Let’s be honest – selling a business is a really big deal. You’ve put years of blood, sweat and tears into building your company. Now you want to make sure you get the maximum value for all that hard work when it’s time to sell it. 

That’s where working with a business broker comes in handy. They know the process inside and out and can help you avoid major missteps. But even with an expert broker guiding you, there are still some common mistakes that sellers make during the sale. I should know – I’ve seen them happen time and time again.

In this post, I’ll go over the top five mistakes I see sellers make, along with tips to steer clear of these pitfalls. My goal is to give you insider knowledge so you can sell your business for top dollar with as little hassle as possible. Sound good? Let’s dive in!

What Does a Business Broker Actually Do?

Really quickly, let me explain what a business broker is for anyone who isn’t familiar with them. In a nutshell, a broker is like a real estate agent for businesses. Their job is to:

– Figure out what your business is truly worth based on the financials and assets (this is called valuation)

– Market your business to qualified buyers and get the word out that you’re open to selling

– Vet potential buyers and handle non-disclosure agreements

– Negotiate with buyers to get you the absolute best deal  

– Handle all the contracts, paperwork and legal stuff from offer to close

Basically, they navigate the whole sales process for you. But you can still make mistakes even with an expert broker. Here are the big ones I see all the time:

Mistake #1 – Holding Back Financial Records 

One of the first things your broker will do is ask for all of your financial and legal records. This includes tax returns, profit/loss statements, commercial leases, customer info – the works. 

But many sellers only hand over partial records or disorganized bits and pieces. This hampers the broker’s ability to accurately value your company. Buyers hate it too.

Your broker needs the full picture – the good, the bad and the ugly. Trying to gloss over problems will bite you later when buyers dig up the issues. Give your broker everything so they can paint an accurate portrait for potential buyers. No hiding allowed!  

Tip: Gather all records now so your broker has what they need. Neat, organized files make valuation smoother.  

Mistake #2 – Crazy Expectations for Sale Price

Here’s another biggie – sellers often have unrealistic expectations about their business value. They cling to that huge valuation from five years ago or numbers based on their emotions rather than facts. This leads to overpricing when first hitting the market.

Your broker will take a hard data-based look at the value. Be ready for a reality check. If you price too high out of the gate, your business will just sit there without buyer interest. Gotta get those goggles off and look at true market value.

Also, remember that the initial asking price is basically never what you end up selling for. There’s always some negotiation that brings the price down a bit. Don’t get rigid about your ideal number – it may cost you in the end. 

Tip: Get multiple valuations done beforehand so you have a solid range. Come in on the lower end of that to start. Easier to negotiate up!

Mistake #3 – Neglecting “Sale Prep”

Once you have a broker, they’ll advise you on prepping your business for sale. But some sellers don’t follow this advice and miss out on changes that could earn them more.

Here are some “sale preps” your broker might recommend:

– Spruce up the place with cosmetic improvements – freshen up the paint, improve the landscaping, polish everything up.

– Get financial records organized and processes clearly outlined. You want to look “turnkey” for buyers.

– Remove obsolete inventory, clean up cluttered areas. Make things shine!

– Talk to key employees about staying through the transition to maintain stability.

Basically, you want your company looking like a well-oiled machine primed for new ownership. Buyers pay more for a smooth transition versus major fixes. Take that advice and run with it!

Tip: Make a master checklist and start methodically improving. It shows buyers you’re serious about selling.

Mistake #4 – Keeping Totally Mum 

It’s understandable you want to keep sale plans hush-hush so employees and customers don’t bail early. But total radio silence can backfire too.

At some point before the sale closes, carefully inform key managers who will aid the transition. If they’re blindsided, you may lose them right when you need them most.

Assess customer relationships too. Major accounts may need a heads up. Don’t let an eleventh hour surprise derail the deal.

Tip: Discuss a communication plan with your broker. Confidentiality agreements still apply. But zero transparency risks problems.

Mistake #5 – Not Listening to Your Broker’s Advice 

Here’s the reality – you hired your broker because they’re the expert. But some sellers ignore the advice brokers give them, hurting their own sale price.

For example, your broker may suggest:

– Lowering overinflated asking prices 

– Making repairs before property showings

– Being flexible on deal terms turning off buyers 

– Tweaking financials to improve outlook

– Considering creative financing to get more buyers

At the end of the day, your broker knows how to get deals closed and make sales happen. Lean on their expertise and follow their lead so you can maximize your outcome!

Tip: Have candid talks with your broker if you have concerns. But let them steer the ship.

The Bottom Line

Selling a business is challenging, so use your broker as a trusted guide. Avoiding mistakes like rigid pricing, poor preparation, secrecy and disregarding good advice will help you nail the sale process.

Stay flexible, transparent and attentive to your broker’s guidance. Do that and you’ll walk away feeling great about the outcome! You got this.