The 5 Biggest Business Sale Mistakes...

Entrepreneur

06-06-2025

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Selling a business is rarely as straightforward as owners expect. I've built, acquired, and sold multiple businesses over the past three decades, and if there's one thing I've learned, it's that most sale challenges are avoidable - if you plan well. Having worked with hundreds of business owners through Chalkhill Blue and written The Exit Roadmap to share what I've learned, I've seen the same costly mistakes come up time and again. In a challenging economy, avoiding these pitfalls becomes even more important. Here are the five biggest business sale mistakes I've seen, and what you can do to steer clear of them.
1. Failing to Plan Ahead
Most owners wait far too long to think seriously about exit. In fact, a shocking 48% of business owners who want to sell have no exit strategy whatsoever 1 . They assume they can put their business on the market when they're ready, and buyers will be lining up. The reality? According to the Exit Planning Institute, 70–80% of businesses that go to market never sell 2 . Often, that's because the owner didn't plan early enough to address the risk factors or prepare the business for sale.
Lesson learned: Start your exit planning at least 2-3 years before your desired sale date. This gives you time to address dependencies, clean up your financials, and build value. As I often say to clients, you can only sell once - do it right.
2. Overestimating Business Value
Understandably, most owners are emotionally attached to their businesses. But emotional investment doesn't always align with market value. In fact, 58% of business owners have never had their business formally valued , which leads to inflated expectations and stalled deals. One couple I worked with was convinced their e-commerce business was worth more than double its realistic value. When we looked at their accounts and buyer appetite in their sector, the truth hit hard. Thankfully, they took the advice, grew the business, and exited at a much higher multiple later on.
Lesson learned: Don't rely on hearsay or assumptions. Get a formal valuation from someone who understands your sector and how buyers think. Benchmark it against recent sales, EBITDA multiples, and market trends. This ensures you go to market with clarity and confidence.
3. Neglecting Operational Dependencies
Many businesses are overly reliant on the founder, a few key staff, or a handful of customers. These dependencies are huge red flags for buyers. One of the most common questions during due diligence is: "What happens if this person leaves?" As I explain in The Exit Roadmap, your business should ideally run without you. A good litmus test? Ask yourself: could you take a three-month holiday without the business falling apart? If the answer is no, you've got work to do.
Lesson learned: Reduce dependency on yourself and others. Document processes, empower your team, and decentralise critical knowledge. Not only does this reduce risk, it boosts your valuation - buyers will pay a premium for a business that operates like a well-oiled machine.
4. Inadequate Financial Documentation
Nothing kills a deal faster than messy books. Poor financial controls, inconsistent reporting, or incomplete tax records are huge turn-offs. According to BizBuySell, 65% of businesses listed for sale each year fail to sell at all, and in many cases, it's due to issues uncovered during due diligence. One buyer pulled out of a deal with a client I advised after discovering £200,000 in unexplained "miscellaneous" expenses. It didn't matter that the business was otherwise profitable - the buyer lost trust, and we had to start again with a new prospect months later.
Lesson learned: Invest in clean, clear, and consistent financial reporting. Get your accountant to prepare monthly management accounts and keep everything audit-ready. The more transparent your numbers, the more attractive you'll be
5. Limiting the Buyer Pool
Too many owners put all their eggs in one basket. They get one offer and run with it, only to discover late in the process that the buyer can't raise funding or wants to renegotiate the price. In truth, the most successful sales usually involve 10-20 potential buyers at the initial stage, with 2-5 serious offers received by the seller. Creating competition between buyers can dramatically increase the sale price. I've personally seen final offers come in 40% higher than the opening bid because we generated competitive tension.
Lesson learned: Cast a wide net. Use a broker or advisor with deep market connections to reach financial buyers, strategic acquirers, and even international prospects. This not only gives you more leverage, it often leads to a better cultural and operational fit too.
Final Thoughts
Selling your business isn't just a financial event; it's a personal milestone. And it's likely the biggest transaction of your life. When I wrote The Exit Roadmap, I wanted to give business owners a step-by-step guide to avoid the mistakes I'd seen others make. These five errors - poor planning, overvaluation, operational dependency, sloppy financials, and a limited buyer pool - are the most common, but also the most preventable. Whether you're hoping to sell in six months or six years, the time to start preparing is now. Future you will be grateful.