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For many entrepreneurs, the sale or transfer of a business is like giving up a baby they have raised from infancy.
Certainly, there’s a lot at stake economically, given that 80% to 90% of owners have their financial wealth locked up in their companies, according to estimates from the Exit Planning Institute, an education, training and credentialing organization. Many owners also underestimate the many emotional aspects that go hand-in-hand with exiting a business.
Here are five mistakes owners should avoid when selling a business.
Failure to plan
Many businesses don’t have an exit plan or they don’t strategize adequately for a multitude of scenarios, said James Jack, who runs the business owners client segment at UBS Global Wealth Management. And that leaves them susceptible in the event of death, divorce or if a suitor, such as a private equity firm that’s hungry for a deal,…