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Be honest when you sell your business

Guest post by: Russell Bowyer

Article Overview: Honesty in business is as it is in life and a must and extremely important. If you are about to sell your business or if you are in the middle of selling it then make sure you are honest from the outset...not only with the broker, if you are using one, but also with potential buyers. If you tell lies at the outset or during the initial stages then it is very likely this will be found out at the due diligence stage of the selling process. The problem with telling lies is that if they get found out you may put off potential buyers and lose their trust.

Be honest when you sell your business

Honesty in business is as it is in life and a must and extremely important. If you are about to sell your business or if you are in the middle of selling it then make sure you are honest from the outset...not only with the broker, if you are using one, but also with potential buyers.

If you tell lies at the outset or during the initial stages then it is very likely this will be found out at the due diligence stage of the selling process. The problem with telling lies is that if they get found out you may put off potential buyers and lose their trust.

Put yourself in the shoes of a buyer and you will know that they will feel both stressed and worried about the whole process. Don't make it worse for them by putting any element of doubt in their mind...they may be thinking if you are lying about one thing you might be covering up any number of other things and they may well walk away from the deal.

I remember going to look at a business which was being advertised as turning over around £8,000 per week, when in fact it was only turning over around £4-5,000 per week. Admittedly, at some point in the past this business had been doing this level of turnover and more, but the broker had not bothered to update their advert. This then wasted my time and their time in looking at a business which was highly over valued.

Always remember that with the majority of business sales that it is a ‘Buyers Market' and rarely is it a ‘Sellers Market' - which means that when you have a buyer on the hook, as it were, you want to play them well and nurture the whole business sales process from start to finish.

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Article Tags: business, due diligence, honesty in business, initial stages, outset, sell, telling lies



Related Forum Posts
Re: How do you earn trust with an online business? - My answer would be - Be honest about both the pros and cons of the business. This gives people a real sense of choice because they know they have all sides of the story, not just the 'hype'. - Don't make empty promises. Only tell someone you will do something if you are going to do it. - Be realistic about what is possible vs. what is probable. E.g. it may be possible to make $10,000 within the first year, but it is unlikely for most people unless they are able to work like mad full time! I find that when I am really honest about the business - and talk about the downsides as well as the up - people really appreciate it and then if they join, you know they have a realistic idea about what they are starting. Ros
Re: "How to Cold Call a Big Customer" - Hello Daryl, I liked this one. I have to cold call in my day job and if I'm honest I'm pretty good at it. But then I've been at it for many years. Some good points. Some lame ones. Pretending to act on the same level as a CEO can get you in a bit of deep water. But I agree with the point that you should not try to sell to the gatekkeper.
Selling my business.... - I am looking to sell my business. It is a profitable business but I want to get out because I am burnt out after 7 years(since I was 17)......... I am almost ready to sell(making the proper preparations)..But I'm unsure about my lease with the landlord. He doesnt seem to want to resign.. I am worried about how marketable my business is with only 2.5 years on the lease... When I sell my business, does my landlord have to resign with whoever my buyer is? Thanks in advance... G.
Lie about your fears - While I don't think it's ever ok to lie to a business partner or investor, I think EVERYONE is guilty at one time or another of primarily focusing on their success and business' strengths, while leveraging their weaknesses (e.g. If you have a small forum membership base, you might sell the fact that a smaller membership translates into better and more intimate discussions. In large online communities, many opinions can be lost in the masses). And whether you're working with a business partner or with other students on a school project, it never does the "partnership/team" any good if you show signs of fear. So I think it's ok to put up a brave face and maintain your composure at all times (even if you're feeling afraid and unsure about what you're doing) just to progress forward. Panic can lead to inaction and business failure, so I don't see the benefit of being honest about your insecurities. In fact, I believe the ship will sink even faster if both business partners are telling one another how scared they are of running their business. Am I wrong?
Re: Isnt Dropshipping better? - [quote="xfriday":134hnqs3]I believe the best way would be to find a drop shipping company so that you dont have to buy before you sell. Once you sell, just forward the order and money (less your margins) to the drop shipping company.[/quote:134hnqs3] A concern I would have with this approach is that you need an honest drop ship company and I'd prefer some sort of non compete agreement in place. Basically, you send the orders for the to fill and an aggressive company could easily "take" your customer mailing list. Might never happen, but something to consider and especially with a smaller company. Shri


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