Preparing to Sell in the New Year: Top Sell-Side Risks — And How to Address Them

For most business owners, selling a company is a once-in-a-lifetime event—one that can shape retirement plans, family legacies, and the well-being of employees and the local community. Because so much rides on the outcome, it’s crucial to recognize the hidden pitfalls that often reduce a seller’s final proceeds or prolong the deal to everyone’s frustration.

Below, we explore the most common risks from a sell-side perspective, along with general strategies to ensure you enter the new year prepared for a smooth, value-enhancing transaction.


Why Sell-Side Risks Matter So Much

Every misstep in the selling process carries a real cost. If you go into a deal underprepared or lacking clarity around your company’s financials, you might receive a lower offer—or face extended due diligence that saps your time, energy, and leverage. Being aware of these potential pitfalls lets you position your business in the most attractive light and retain control of the process.


Common Pitfalls Sellers Face—And How to Address Them

1. Relying on Irregular or Outdated Financials

  • Why It’s a Problem: Many owners keep close tabs on annual results but don’t consistently track monthly or quarterly trends. When a buyer sees gaps or inconsistencies, they perceive higher risk—and can lower their offer or demand more scrutiny.
  • How to Address It: Work with financial advisors to standardize your reporting. Presenting well-documented, credible statements signals a healthy business and speeds up buyer confidence.

2. Underestimating the Role of a Quality of Earnings (QOE) Analysis

  • Why It’s a Problem: As acquirers grow more sophisticated, many expect a deeper look at revenue streams, customer contracts, and profitability drivers—beyond your standard financial statements. If you don’t prepare for this, you could face last-minute concessions.
  • How to Address It: Consider engaging professionals to conduct or review a QOE analysis on your terms. This proactive approach helps you spot and fix red flags before a buyer uses them to negotiate down the price.

3. Overlooking Working Capital Management

  • Why It’s a Problem: Buyers typically look at historical benchmarks to determine how much cash, inventory, and receivables are necessary to run the business post-sale. If you carry excess inventory or have slow receivables, you might effectively lower the proceeds you take home.
  • How to Address It: Identify ways to optimize inventory levels and improve receivables collection. A leaner working-capital structure often boosts your credibility—and your final payout.

4. Accepting a Single Offer Without Exploring Options

  • Why It’s a Problem: An unsolicited offer can be tempting, but going straight into one-on-one negotiations might mean missing out on stronger bids or better deal structures.
  • How to Address It: Before committing, at least gauge the market’s interest. A quick market test or strategic outreach can confirm whether you’re getting a fair price and terms.

5. Sharing Confidential Information Too Soon

  • Why It’s a Problem: Sellers sometimes provide proprietary data—like detailed customer lists or trade secrets—before nondisclosure agreements or careful buyer vetting are in place.
  • How to Address It: Protect yourself. Work with advisors to set up phased disclosures. An NDA is essential, but also confirm buyers have the financial capacity and genuine intent to proceed before revealing highly sensitive information.

6. Delaying Professional Guidance

  • Why It’s a Problem: By the time you bring in M&A advisors, attorneys, or tax specialists—often after an informal “handshake” deal—you may have already given away negotiating power or overlooked key tax-efficient deal structures.
  • How to Address It: Engage experts early. They can streamline the sale process, optimize deal terms, and let you focus on running your business instead of getting bogged down in technical details.

7. Letting Operations Slip During the Deal

  • Why It’s a Problem: Sellers often get so absorbed in negotiations that they neglect core operations—leading to missed sales or declining performance just when buyers are paying the most attention.
  • How to Address It: Delegate. Let your advisory team handle much of the deal process, and keep your attention on maintaining the business’s growth and profitability. Sustained strong performance only strengthens your negotiating position.

8. Not Maximizing Value for Your Family, Employees, or Community

  • Why It’s a Problem: When sellers don’t capture the full value of the business, that lost equity doesn’t disappear—it simply transfers to the buyer. This can mean fewer resources for personal retirement, community philanthropy, or employee rewards.
  • How to Address It: Recognize the broader impact of your sale price. Engaging professionals to secure a fair—and potentially premium—valuation helps ensure those resources remain with you, your family, or your local community.

9. Accepting Unclear or Prolonged Due Diligence Timelines

  • Why It’s a Problem: Buyers might drag out the due diligence phase, causing “deal fatigue” and creating opportunities to renegotiate. Sellers without proper support may feel compelled to accept these changing terms just to close the deal.
  • How to Address It: A structured, preemptive approach sets fair timelines and expectations. When you prepare documents and data in advance—and have advisors ready to manage buyer requests—you’re less likely to be at the mercy of endless negotiations.

10. Assuming All Buyers Have the Same Post-Sale Objectives

  • Why It’s a Problem: Private equity groups, strategic acquirers, and other buyers each have unique timelines and culture-integration approaches. Treating them as interchangeable can lead to misaligned post-sale expectations for you or your employees.
  • How to Address It: Early in discussions, clarify each buyer’s vision for your company—whether that’s rapid expansion, tighter cost controls, or something else. Aligning with a buyer who shares your values and goals can lead to a smoother transition.

How Brady Martz Can Help

At Brady Martz, our Valuation, Transaction, & Transformation (VTT) team understands that selling your business is about more than just signing on the dotted line; it’s about achieving the right outcome for you, your employees, and your community. We offer:

  • Financial and Operational Readiness Assessments to standardize reporting and optimize working capital.
  • Quality of Earnings Insights that ensure you’re equipped to handle buyer scrutiny.
  • Tailored Deal Structuring to safeguard your interests—legally, financially, and tax-wise.
  • Transaction Management Support so you can keep your attention on running a profitable operation during the sale process.

Interested in learning how to protect your hard-earned value in the new year? Reach out to Brady Martz today. Together, we’ll craft a proactive sell-side strategy that helps you avoid common pitfalls and secure the future you’ve envisioned.