5 Common Mistakes to Avoid When Selling Your Business
August 8, 2025 · 5 mins
For many entrepreneurs, selling their business is the single most significant and emotionally charged financial event of their lifetime. It’s often a once-in-a-lifetime experience that represents the legacy that they’ve built, sometimes even carrying their name and deep personal meaning. The process is not only complex from a financial and legal standpoint, but also comes with a heavy emotional weight.
When everything goes smoothly, both parties leave satisfied: the seller feels confident they received fair value, and the buyer believes they made a sound investment. But when the process falters, it can lead to frustration, regret, and financial loss.
At Confederation M&A, we’ve helped countless business owners plan and execute successful exits. Here are five of the most common mistakes we see when selling a business and how to avoid them.
1. Waiting Too Long to Start Planning
The best time to prepare for a sale is well before you’re ready to step away. Waiting until you’re burned out or facing a downturn often limits your options and your value.
While most owners aim to maximize the value of their company, some overlook the significant impact tax planning can have on the final outcome. For instance, selling shares versus selling assets can lead to very different tax consequences, so it’s important to understand the implications of each approach. With proper planning, it’s often possible to reduce the overall tax liability.
Additionally, the sales process itself is more demanding than many expect, it can take anywhere from six months to a year and often requires a significant time commitment from the owner. Preparing in advance by understanding value drivers, organizing financials and streamlining the balance sheet can help ensure you maximize value. These seemingly minor steps can make a major difference in the outcome of a sale.
“Ideally, owners should start thinking about exit planning years in advance. There are specific value drivers that owners can implement to increase the value of their business. A well-prepared business is more attractive to buyers and allows the sellers to maximize the value of their company.” – Trisha Mossey, Partner, Confederation M&A.
Planning early can ultimately allow you to achieve a higher value for your business.
2. Overvaluing the Business
Many private business owners are caught off guard when they discover the true market value of their company. In many cases, owners have an inflated perception of what their business is worth, which can become a significant obstacle during a sale. If they believe an offer falls short of their expectations, even if it’s fair, they may hesitate or walk away.
Ultimately, a company’s value comes down to what the market is willing to pay. That’s why it’s essential for owners to get a clear, realistic, independent, market-based valuation before putting their business on the market. If the estimated value is lower than anticipated, there may still be time to make strategic improvements that could enhance the company’s worth before pursuing a sale.
3. Lack of Confidentiality
Selling a business is very different from selling real estate, largely because people, employees, customers, and suppliers play such a central role in its success. News of a potential sale can leave your employees feeling uneasy and uncertain, and can prompt key team members to leave, which can negatively impact operations. Likewise, if clients or vendors become aware of an upcoming ownership change, they may begin to question their ongoing relationship with the business.
Being cautious with how and when information is shared can help preserve the business’ stability and protect its’ value.
“We’ve seen deals fall apart because of unintended leaks. Maintaining strict confidentiality protects your business during the process and keeps operations stable.” – Trisha Mossey, Partner, Confederation M&A.
Working with an M&A advisor ensures that marketing to buyers happens quietly and professionally, under proper NDAs (non-disclosure agreements).
4. Neglecting the Business During the Sale Process
Selling a business is time-consuming and a lengthy endeavour. It’s easy for business owners to take their foot off the gas but declining performance during the process can lower value or scare off buyers entirely. When it comes to closing the deal, if you’ve seen a decline in performance over the past 6 months or a year, that can signal a sign of caution to engaged buyers and reduce the final amount you may receive when all is said and done.
Buyers want to see momentum. They want to know the business is still growing, still profitable, and still well-run right up to the closing date.
5. Trying to Sell the Business on Your Own
Going the DIY route might seem appealing, but unexpected issues can arise, and the chances of a smooth, successful outcome are slim. Business owners are used to being hands-on. Selling a business is complex and you don’t want to miss key details or leave money on the table because you tried to do it all yourself.
Hiring an experienced M&A advisor or broker can make a significant difference. Not only do they bring access to a broader network of qualified buyers, but they also help navigate the complexities of deal structure, negotiations, and due diligence. Selling a business involves a number of moving parts, and even seasoned professionals encounter challenges. A qualified advisor helps protect your interests and maximize value.
Successful Sales
By avoiding these common mistakes, you’re setting yourself up for a more successful sale in the future while building a stronger, more resilient business today. Many of the strategies that increase your company’s value can also improve your day-to-day operations of the business.
The earlier you make the necessary improvements and the longer they demonstrate results, the more attractive your business will be to buyers.
Most importantly, surround yourself with professionals who specialize in business sales, consider an M&A advisor, tax accountant and M&A lawyer. Their expertise can be the difference between an average outcome and a great one.
At Confederation M&A, we help owners across Canada and beyond execute successful, confidential exits whether you’re ready to sell today or just starting to explore your options.
Let’s talk about how we can help you prepare your business for a successful sale.
Trisha Mossey, Partner
trisha.mossey@confederationgroup.ca
