Mistakes when selling a business and how to avoid them
Selling a business is one of the most important decisions in any entrepreneur’s journey. It is a complex process, combining financial, legal, strategic and emotional factors. However, many owners make mistakes that can significantly reduce the value achieved—or even derail the transaction. The good news is that most of these mistakes are avoidable if identified early and addressed with the right advice.
Below, we analyse the most common mistakes when selling a business and explain how to avoid them to maximise transaction value.
1. Lack of planning and clear objectives
A first frequent mistake is starting the sale process without rigorous planning or a defined objective. Before taking a business to market, the owner must be very clear on why they want to sell, what they expect to achieve and what type of buyer they are looking for.
Without a strategic roadmap, the sale can easily drift: poorly selected offers, unmanageable timelines or unfavourable conditions. Proper preparation should include a realistic timetable, the compilation of financial and legal documentation, and the definition of the key indicators that will determine the success of the transaction.
At Maraz Corporate Finance we insist on the importance of this initial phase: a well-planned sale is a sale that closes on better terms and with fewer surprises.
2. Timing mistakes: waiting too long or rushing
The timing of a sale is as important as the sale itself. Many entrepreneurs make the mistake of waiting indefinitely, assuming the company’s value will continue to rise. But markets change, sectors transform and opportunities disappear.
The opposite extreme is equally dangerous: selling in a hurry due to personal reasons, a crisis and urgent financial pressure, or simple exhaustion. In those cases, the owner often accepts less favourable conditions or loses negotiating leverage.
The optimal moment to sell is usually when the business shows strong results, stable prospects and a solid internal structure. Planning the sale sufficiently in advance allows you to prepare documentation, choose the right buyer and negotiate from a position of strength.
3. Limiting yourself to a single buyer or a local market
Another common mistake is negotiating with a single buyer from the outset or limiting the search to the local environment. Although it may seem simpler, it reduces competition between potential bidders and therefore weakens the seller’s negotiating power.
A professional approach is to create a competitive process, identifying multiple potential buyers (strategic, financial or industrial) and encouraging a comparison between offers. This increases the chances of achieving a better price and more favourable terms.
In addition, widening the search to national and international markets can reveal opportunities far more attractive than those available locally. At Maraz, we help clients identify both domestic and foreign investors interested in their sector.
4. Not preparing the business for sale (vendor due diligence)
Before negotiations begin, the company must be ready to be scrutinised by potential buyers. Many owners overlook this phase and go to market with incomplete or disorganised information, which creates mistrust and delays the process.
Preparing the business involves conducting an internal, pre-sale due diligence review—covering all financial, accounting, legal, employment and tax aspects. It is also advisable to correct irregularities, remove non-recurring costs and ensure key contracts are properly documented.
A well-prepared business signals professionalism and credibility, shortens timelines and reduces the buyer’s room to renegotiate. <a href="https://maraz.es/due-diligence/" style="color:red;">Read more about Due Diligence</a>
5. Unrealistic valuation
One of the most costly mistakes is setting an unrealistic sale price. Some entrepreneurs overvalue their business for emotional or personal reasons; others undervalue it due to lack of information. In both cases, the outcome is negative: either potential buyers are deterred, or value is unnecessarily left on the table.
A company’s value does not depend on what the owner invested or needs to “recover”, but on its future capacity to generate cash, the risk profile of the business and prevailing market conditions.
That is why it is essential to obtain a professional valuation before launching the sale. At Maraz Corporate Finance we use established methodologies—such as discounted cash flow (DCF) and market multiples—to determine a reasonable valuation range that can be defended in negotiations.
6. Accepting risky payment terms
Another common mistake is accepting payment structures that are overly complex or insufficiently secure. The objective of selling a business is to convert its value into liquidity; however, many sellers accept deferred, variable payments or buyer shares without properly analysing the risks involved.
Earn-outs, deferred payments or share swaps can be reasonable if well structured, but they should always be accompanied by strong protections: personal guarantees, default interest, collateral or termination clauses in case of non-payment.
The recommendation is clear: prioritise cash at completion. In any event, Maraz’s financial advisers can help assess the buyer’s creditworthiness and structure appropriate protection mechanisms.
7. Failing to maintain confidentiality
Confidentiality is critical in any sale process. If news that the business is for sale leaks prematurely, it can trigger negative effects: loss of customers, employee uncertainty or tensions with suppliers.
For that reason, it is essential to put confidentiality agreements (NDAs) in place with all interested parties before sharing sensitive information, and to strictly limit who knows the details of the process.
At Maraz, we manage sales processes with full confidentiality, protecting the business’s reputation and avoiding leaks that could affect value or day-to-day operations.
8. Neglecting communication with employees, customers and suppliers
Just as important as confidentiality is planning when and how to communicate the sale to internal and external stakeholders. Many entrepreneurs do it too late or in an improvised way, generating mistrust and instability.
Employees should receive a clear and reassuring message once the transaction is advanced, emphasising business continuity and the opportunities a new owner may bring.
The same applies to key customers and suppliers: communication must be transparent, controlled and consistent with the strategic narrative of the transaction. The transition should project confidence, not uncertainty.
9. Losing focus on running the business during the process
While the sale is being negotiated, the business must continue to operate normally. A very frequent mistake is for the owner to neglect day-to-day management, thinking the business is “already sold”.
Buyers will analyse recent performance and operational results during due diligence. If results deteriorate or sales fall, the final price will be adjusted downward.
Therefore, until signing, the owner must remain fully focused on maintaining—or even improving—profitability. If the process workload makes this difficult, the owner can rely on the management team or on an external corporate finance adviser to avoid losing operational focus. See Maraz support services (Fractional CFO) during the process.
11. Not using specialised professional advisers
The most decisive mistake is attempting to sell the business without professional advisers. An M&A process requires technical, financial, tax and legal expertise that goes beyond the experience of most entrepreneurs.
Having a specialist financial adviser allows the transaction to be structured correctly, the business to be valued objectively, qualified buyers to be identified, negotiations to be conducted on equal footing, and mistakes to be avoided that could cost millions.
At Maraz Corporate Finance, we support owners through every phase of the process to avoid mistakes when selling a business:
- Business valuation and analysis.
- Sale strategy design.
- Identification of, and outreach to, potential buyers.
- Negotiation and coordination of the due diligence process.
- Support in negotiating the SPA, signing and closing the transaction.
The result is a faster, safer transaction and an optimal final value for the seller.
A business sale should not be improvised. The most common mistakes—lack of planning, poor valuation, leaks, misalignment or lack of advice—can have serious consequences. However, all of them are avoidable with preparation, strategy and expert support.
At Maraz Corporate Finance, we help entrepreneurs structure and execute sale processes that are efficient, confidential and focused on maximising value. Our team combines experience, technical rigour and strategic vision, turning a transition moment into an opportunity for personal and financial growth.
If you are considering selling your business, contact us and we will support you at every step to ensure a successful sale without setbacks.
Javier de Rojas Roca de Togores
Partner – Maraz Corporate Finance
