Entrepreneurs spend years and decades of dedication and struggle to advance their businesses, but they can make some mistakes that derail their path to success.
In her report, published by the American magazine "Forbes", writer Andrea Boussid says that she and her team worked with countless entrepreneurs and were able to take a broad look at many industries and see the fatal mistakes that entrepreneurs make and lead to their failure. This is partly due to the volatile economic landscape of the past few years.
Millennials who have owned one company during their careers are especially at risk of making mistakes in the short term.
This generation just so happens to be approaching retirement age amidst a global pandemic, a labor shortage crisis, persistent supply chain problems and soaring fuel prices.
It is no wonder that many feel the need to rush the sale and suffer any losses that may result.
Here are the 3 most important mistakes entrepreneurs make, and what they should do to avoid those mistakes and problems.
Selling before solving the problem of labor shortages
Sometimes a lack of staff is the deciding factor behind closing a business and offering it for sale, but the main value in most business ventures is not location and inventory, but rather the talent, experience and loyalty of the people who work in it.
Each vacancy means more work for the rest of the employees, especially the director of the company.
When buyers are looking for a business to buy, they are looking for an investment, not a job.
Potential buyers value their time and will not be eager to take on the duties necessary to keep this business going while at the same time recruiting employees to fill those vacancies.
panic selling
The second mistake entrepreneurs make is to panic while trying to sell their business as quickly as possible. Going slowly and thoughtfully will help protect business value as well as gain customer and employee trust.
As interest on government disaster loans increases, staff shortages and supply chain problems are adding to the strain on business owners.
Despite their best efforts, owners who have put off the commissioning plan and are running out of energy in the day-to-day crises see the decline in the value of their business as irreversible.
At this point, many owners end up shutting down their projects completely, making the situation worse.
Expect a fixed selling price
The third mistake is that owners expect a fixed selling price that is often too high.
And to be without financial installments.
In fact, the best solution for both parties is often a different system. Whether that's paying by annual installments or involving the previous owner staying and earning a percentage of the revenue, flexibility can pay off for everyone.
In this way, larger lump-sum payments can be achieved, capital gains taxes lower for the seller, and greater employee and customer confidence.
Tips for Business Owners
After identifying the most prominent of these problems, the following question must be answered, what can business owners do to protect the value of their projects at the present time and in the future?
Doing an annual business analysis:
This is what makes business gain value.
As well as tracking assets and market forces, selling your project should not be a sudden reaction, but you should be aware of its position in the market at any time.
Updating internal records:
This will provide a lot of clarity to any potential buyers, as records relating to finances, personnel and operations must be understandable and organized.
Stay aware of external perceptions and nurture searchable elements of your business image:
It pays to put in the effort and money to correct any bad impression that might have an impact on your ROI when it comes to selling your business - and its reputation - to a new owner.
Don't let staff shortages and other crises drive you into a panic:
Use staffing agencies to work around shortages, and negotiate rather than default.
Such efforts can maintain the continuity of the institution and serve as a basis for restoring its position and fully assessing its value.
And when completing any transaction, a good trading broker can help you by making sure that you don't let any money or efforts you have made go to waste.