The Hidden Pitfalls of Selling a Business

Selling your business can be an exciting milestone – especially if you’re eager to move on to new ventures or enjoy a well-earned break. But the process is rarely straightforward. It can be lengthy, demanding, and full of moving parts.

While your focus might be on getting the deal done, there are several easily overlooked issues that can cause problems if not addressed early. This guide highlights some aspects of selling a business that can cause problems – and how you can steer clear of them to protect your position and maximise value.

What can cause problems for a business sale?

There are a number of issues that can quietly undermine a business sale if they’re not addressed early. Some may seem minor at first glance, but if left unchecked, they can lead to delays, renegotiations or even cause the sale to fall through. These include:

• Confidentiality breaches: if the word gets out that your business is for sale before it should, it can create unnecessary disruption. Employees might worry about their future, competitors could use the information to their advantage, and client relationships may be affected. 
• Ambiguous heads of terms: the heads of terms are meant to set out the key commercial points of the deal – but if they’re vague or unclear, they can cause confusion later. You could find yourself wasting time negotiating issues you thought were already agreed. Getting this part right from the outset helps ensure smoother negotiations and reduces the risk of costly misunderstandings down the line.
• Disorganised record keeping: if your financials, contracts or company records are in disarray, it can put buyers off or give them an excuse to drive down the price. You’ll be expected to provide detailed documentation during due diligence, so the more organised you are, the more confident a buyer will feel – and the more likely the deal is to proceed smoothly.
• Failure to prepare: selling a business is never just about putting it on the market and waiting for offers. You need to prepare well in advance – both financially and operationally. If you don’t take the time to get your business into the best possible shape, you risk underperforming during the sale period, which can lead to a lower valuation or the buyer asking for a price reduction.
• Disputes about contracts: if there are gaps or grey areas in your contracts with customers, suppliers or staff, these can quickly become sticking points during the sale. The buyer will be looking closely at your contractual obligations, and any uncertainty could delay the process or affect the final deal. Sorting out any issues in advance will help avoid last-minute complications.
  

What can you do to make sure your business sale goes smoothly?

Selling a business is a significant step, and taking a carefully considered, well-organised approach can help you avoid delays or unwanted surprises. Here are three important areas to focus on if you want to keep the process on track:

Preparation and organisation

Proper preparation can make a noticeable difference to how smoothly your sale progresses. It’s worth taking the time to plan each stage carefully – including how the business will continue to run during the process, what the handover will look like and who will be responsible for each part of the transaction. A clear structure helps avoid confusion and keeps the sale moving in the right direction.

You should also review and organise your business records well in advance. Buyers will expect full visibility over the business they’re acquiring, and presenting tidy, up-to-date documentation – including financial statements, contracts, employee details and compliance records – helps build trust and demonstrates that your business is well run.

Concise agreements

To protect your position, it’s important to have the right legal documentation in place from the outset. Confidentiality should be maintained throughout the sale process, and this begins with having non-disclosure agreements signed before any sensitive information is shared. Without this, there’s a risk that commercially valuable or personal details could be passed on or misused, which may damage your business or weaken your negotiating position.

In addition, your heads of terms should be clearly written and comprehensive. This document sets out the main terms of the deal and helps establish a shared understanding between you and the buyer before more detailed contracts are drawn up. If it’s vague, inconsistent or missing key points, it can create confusion, lead to disputes, or open the door to last-minute changes. Taking the time to get this right early on can save considerable time later, reduce the likelihood of friction, and help the rest of the transaction proceed more smoothly.

Consult with experts

Selling a business involves a series of legal, financial and operational steps – all of which need to be handled carefully to avoid unnecessary delays or disputes. Speaking to professionals early in the process can help you identify potential issues and put the right plans in place before problems arise.

Business sale solicitors bring legal expertise that’s tailored to the specific needs of business transactions. They review and draft documents such as heads of terms, confidentiality agreements, and sale and purchase agreements, making sure everything reflects your intentions clearly. If a buyer raises concerns or requests changes, your lawyer can help you understand the implications and respond with confidence.

Legal advice also plays a key role in managing risk. For example, your lawyer can identify any clauses in existing contracts – such as leases or supplier agreements – that might affect the sale. They also help clarify your responsibilities after completion, including warranties or ongoing obligations that may be part of the deal.

By working with a lawyer who has direct experience in business sales, you gain a clearer view of the process, reduce the likelihood of overlooked details, and stay in control of the terms at every stage.

While it may seem like there’s plenty that could go wrong during a business sale, many of these risks can be avoided with the right preparation, professional advice and a well-structured approach.