Economic conditions have improved significantly in North Carolina and around the country in recent years, and some entrepreneurs in the Tar Heel State may be thinking that now is a good time to cash out and sell their businesses. While the volume of mergers and acquisitions tends to increase during times of prosperity and economic growth, that does not mean that negotiations will be straightforward and buyers easy to find.
One of the major pitfalls to avoid when selling a business is trying to hide inconvenient truths. Just as home sellers move furniture to cover damage and spray air freshener to conceal the odor of rising damp, entrepreneurs may seek to hide aspects of their business operations that could deter buyers. Taking this approach is rarely effective, and attempting to mislead business buyers can backfire with disastrous results. Those seeking to buy commercial ventures are generally shrewd and cautious, and they usually retain capable legal and financial professionals to pore over financial statements and contracts.
Another mistake frequently made by entrepreneurs is making statements or projections that are unlikely to be proven correct. It can sometimes take a year or longer to complete an acquisition, and buyers may reevaluate their positions if claims and promises made by entrepreneurs early in the sales process fail to materialize.
Entrepreneurs often become highly attached to their businesses and may take any kind of criticism personally. This could be a valuable asset when businesses are being built, but it can be a great liability at the negotiating table where cool heads generally prevail. Attorneys familiar with the legal steps involved in buying and selling companies may be able to help entrepreneurs to avoid common pitfalls while advocating vigorously on their behalf. Attorneys could also check the references and credentials of prospective buyers to make sure that they have the means necessary to complete the acquisition.