Discover the CapEQ approach to a premium exit
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The Gist
Most owners only sell a business once, which makes mistakes inevitable — and expensive. The 12 most common pitfalls when selling a business are: going it alone, choosing the wrong M&A advisor, fixing a minimum price too early, making claims without evidence, approaching a competitor first, selling at the wrong moment, taking the first offer, misreading valuation metrics, rushing the process, not making time for the sale, talking more than you listen, and playing hardball. Sidestep these and you protect both the value of your deal and the legacy you have spent decades building.
- Selling a business is rarely repeatable, so most owners learn the hard way.
- The 12 mistakes below cluster around three themes: preparation, partners, and patience.
- An experienced, empathetic advisor protects both your number and your nerves.
Few business owners get everything right first time when they sell a company. The most common missteps cluster around the same blind spots — unrealistic price expectations, misjudged buyer appetite, and the mistaken belief that you can do it all yourself. Here is our take on the 12 traps to sidestep, drawn from decades of partner-led mid-market M&A advisory work.
1. Going it alone
Who would learn to drive without an instructor, or file a complex tax return without expert support? Plenty of people, it turns out — and occasionally it works. Read a few books, watch a few videos, talk to a colleague, and cobble something together. How hard can it be?
In any complex situation — and an M&A transaction is necessarily multi-faceted — what you don't know matters more than what you do.
Nobody gets it right first time, so why not lean on someone who has learned on the job for decades? Money saved on advisory fees is usually spent twice over correcting wrong turns and clearing up after mistakes.
Selling a business without an advisor is like climbing a mountain without an expert guide or proper kit. You may make progress, but never as much — and you take huge risks along the way.
Avoid this by: speaking to an experienced M&A advisor early, even if you are years away from a sale.
2. Choosing the wrong M&A advisor
Of course, choosing the right business sale advisor matters as much as choosing one at all.
Appoint someone who has not completed multiple M&A transactions before, and you will hit walls, barriers, and objections that a more experienced advisor would have anticipated.
Look beyond experience, fees, and accolades. Ask whether they feel right for you — whether they care enough about what you do, and whether they truly understand what makes your business yours. The EQ Difference matters here as much as the spreadsheet.
Avoid this by: interviewing two or three advisors and asking each how they would tell your story to a buyer.
3. Setting a minimum price too early
It is normal. It is natural. And it is almost always a problem. By definition, you cannot know your price until a rigorous valuation is complete.
It also tends to fail in practice — almost everyone pitches their figure too high. Start with a number rather than a search for value, and disappointment usually follows.
Avoid this by: working from an evidence-based valuation, not a hoped-for outcome.
4. Making claims without evidence
It is tempting to talk up your sale value to maximise the number you can secure. That only works if the claim is backed by evidence. Without supporting data, vague assertions end badly. The acquirer loses trust in your figures.
They will mitigate that risk by loading liabilities onto you, or simply walk away to a more viable target.
In any valid transaction, the truth surfaces eventually. Stay fair, honest, and evidence-based — everything moves more smoothly that way.
Avoid this by: preparing your data room before you approach the market, not during diligence.
5. Selling to a competitor first
The most obvious buyer is the person you know — the one who has always wanted, or always competed for, your business. Surely it makes sense to approach them first?
Wrong. It is almost impossible to secure a defensible valuation from the first person you ask, especially if you know them well.
They are perfectly placed to make an offer over an agreeable meal and a bottle of wine. Then, in the weeks of negotiation that follow, that offer is repeatedly revised down as they 'discover' unexpected realities or even imaginary issues.
You confuse their affability and your shared history with fairness. You make unjustified allowances. With no competitor bids to pitch against the diminishing offer, you are backed into a corner. You take the deal or back out — disappointment either way.
Avoid this by: running a structured process with multiple credible buyers from day one.
6. Selling at the wrong time
Businesses are often put up for sale at exactly the wrong moment — usually because of deteriorating financial performance or personal pressure such as illness or divorce.
Selling in a downturn is doubly hard. There are more companies like yours on the market, and fewer buyers, as acquirers put deals on hold to ride out the storm. Sometimes the better answer is not exiting at all.
Forced sales for personal reasons may feel unavoidable, but there are usually alternatives to a full business exit. Consider bringing in a management team so you can step back without selling outright.
Avoid this by: planning your exit two to three years ahead, so you go to market on your terms.
7. Taking the first offer
As above, it can be tempting to accept an early offer just to avoid the time, hassle, and emotional head-spinning of a multi-bidder sale.
It is highly unlikely that anyone will pay over the odds without competitive pressure. Unless you have no choice, take your time.
A good M&A advisor will hold the stress of a protracted exit period and create the auction conditions that free you up to explore every opportunity.
Avoid this by: treating the first offer as the starting line, not the finish line.
8. Misreading valuation metrics
Value depends on comparable metrics — recurring revenue, market share, customer churn, profit margins, and so on. A surprising number of business owners have only a passing understanding of how these work.
If you have hired a trusted M&A advisor, they will be able to show you that you are not being short-changed. If you have not, you will end up questioning everything. Take the time to find an advisor you trust, and learn which key performance indicators (KPIs) actually move value and saleability.
Avoid this by: asking your advisor to walk you through the comparable transactions behind your number.
9. Rushing the sale
Sometimes a sale must complete inside a fixed window for commercial or personal reasons. Where that is the case, make the reasons clear so everyone understands the rules of the game.
In every other scenario, why constrain yourself? Move at speed, yes — but only as fast as is necessary to get the job done properly.
Any M&A advisor worth their fee should be able to put processes in place to move forward efficiently and explain why the timings are what they are. They will find the optimum pace and procedures to secure the best negotiating position and the strongest outcome.
Avoid this by: agreeing a realistic timeline upfront, then revisiting it at every stage gate.
10. Not making time for the sale
In the run-up to exiting your business, it is essential to work on your business, not in it.
If you are the owner-director of a vibrant company, it is tempting to keep on with day-to-day troubleshooting and let your M&A advisor do most of the heavy lifting. That is fine in itself — but you still need to be present and engaged.
Make yourself available. Block out the time. Treat the sale as the priority it is.
Avoid this by: delegating one operational area before you start the process, not during it.
11. Talking more than listening
The ideal M&A transaction is built on shared knowledge and understanding. Keep asking questions — both to work out how best to position your business, and to understand each bidder's motivation, priorities, biases, and needs.
The more you listen and the less you talk, the more you learn. And the more you learn, the better positioned you are to avoid pitfalls and reach the exit you want.
Avoid this by: going into every meeting with three open-ended questions ready.
12. Playing hardball in negotiations
Few of us are wholly dispassionate, objective people. We get upset and angry. Passion can be channelled productively, but overuse is always counterproductive.
We also tend to lock onto a position and find it hard when our assumptions, figures, and conclusions are challenged. Ultimatums get issued. Positions become fixed. Anyone declaring 'the deal is off unless we hit £X, or you do Y, or you accept Z' tends to lose their suitor, alienate them, or block compromises that would otherwise close the gap.
That is why the temperament and experience of a good advisor matter as much as their technical capability. By pouring oil on troubled waters, a thoughtful advisor can stop negotiations from becoming waterlogged or sunk.
Avoid this by: agreeing your walk-away position privately with your advisor — and trusting them to defend it for you.
Going alone vs using an M&A advisor: at a glance
How a structured, EQ-led process changes each stage of the journey.
About the author
James Pugh is a Partner at CapEQ, the Certified B Corporation mid-market M&A advisory. He has led transactions across technology, healthcare, manufacturing, and professional services over a 15-year M&A career. Read his full bio or book a confidential chat.
.This article is part of our Business Sale Process Unpacked series. Helpful further reads:
