The Biggest Mistakes Business Owners Make When Selling (And How to Avoid Them)

Selling your business is likely the biggest financial event of your life. But too many founders walk into the process without a clear plan—and end up losing value, stalling deals, or stressing out unnecessarily. After years of helping companies navigate middle-market M&A, I’ve seen the same mistakes again and again. The good news? They’re avoidable—with the right preparation and guidance.

Here are the top mistakes I see, and exactly how to avoid them.

1. Waiting Too Long to Prepare

The moment you start thinking about selling is the moment you should start preparing. Why? Because once a buyer is interested, speed, clarity, and credibility are everything.

How to avoid it:

• Clean up your books. Make sure you have at least three years of accurate P&Ls, balance sheets, and tax returns—ready to go and easy to explain.

• Delegate operations. If the business can’t run without you, that’s a red flag. Buyers want confidence that the business will thrive post-sale.

• Address red flags. Common ones: customer concentration, unclear IP ownership, and undocumented key processes. If you can’t fix these, be prepared to tell a story / have a narrative ready.

2. Focusing Only on Price

Headline purchase price might grab your attention—but what you actually take home is driven by structure.

How to avoid it:

• Look at the structure. Payment terms, earnouts, escrows, and survival can shift your payout dramatically.

• Negotiate the structure. It’s critical to define clear earnout metrics and escrow release conditions. A “$20M deal” with $8M in escrow and a 3-year earnout is not really $20M.

• Balance risk. Understand trade offs between upfront cash and post close payouts. Sometimes a slightly lower upfront price with cleaner terms is a better financial outcome than chasing the number.

3. Running a “One Buyer” Process

Getting one inbound offer might feel like a win—but it often leads to a weak negotiating position and unfavorable terms.

How to avoid it:

• Create competition. Even informal buyer interest increases your leverage.

• Use a teaser & CIM. Share high-level info anonymously to attract multiple bidders without revealing sensitive details.

• Set deadlines. Control timing to maintain momentum and urgency.

• Hire an investment banker! While the fees can raise eyebrows, it is often worth hiring an investment banker to run a competitive process, create your CIM and keep the potential buyers interested.

4. Underestimating Diligence

Due diligence is often the longest and most draining part of the process. If you’re unprepared, it can derail the deal—or wear you down until you concede on terms just to finish.

How to avoid it:

• Pre-pack your data room. Have your financials, cap table, contracts, HR records, and corporate docs organized from the start.

• Assign a point person. Let your ops or finance lead field diligence requests. This way, you’re not in the weeds daily (and helps to show how successfully you’ve delegated your business).

• Push back on scope. Buyers will ask for everything. Work with your lawyer to define what’s reasonable and what’s not.

5. DIY Legal Strategy

Your buyer will have M&A counsel. If you don’t, or you use general counsel unfamiliar with the pace and stakes of a sale, you’ll be at a serious disadvantage.

How to avoid it:

• Hire an M&A specialist. Like me! This isn’t the time for a generalist. You want someone who negotiates M&A transactions for a living.

• Redline the right things. Focus on high impact provisions (i.e., the terms that have economic impact).

• Consider RWI. Representation & warranty insurance can smooth out risk allocation and reduce the need for large escrows and negotiations.

Selling your company is complex—but the biggest risks are often self-inflicted. With the right prep, the right team, and the right strategy, you can sell confidently—and protect the value you’ve built.

Ready for an exit? Get on the list for my free M&A Readiness Checklist (coming soon!).