(And Why Most of Them Happen Long Before You Think You’re Selling)

Most business owners think selling a company is a transaction.

It’s not.

It’s a long psychological and strategic journey that starts years before a deal ends and well after the ink dries. And it you are a first-time seller, the biggest risks aren’t technical mistakes they are human ones.

Understanding the rookie mistakes in the M&A process can save you from significant pitfalls.

I’ve come across businesses that have been flattered by the emails and calls made by Private Equity firms, strategic buyers or their advisors. They’ve shared some details, or responded via email or a call. They don’t realize that all of this information is being gathered and the process has started.

The playing field is uneven. Just have to look at the number of businesses that go out to market actually sell successfully the first time (its between 20 – 30%). Also, sellers underestimate how much their emotions and ego will impact their decision making and rational.

If you’re anywhere between “someday I might sell” and “we’re starting to get good inbound interest,” then this is for you.

Mistake #1: Not Realizing When the Negotiation Starts

Most owners believe negotiation or the haggle begins when price is discussed. In reality, it starts the moment you begin thinking differently about your business. Why?

• You go to more conferences,
• You take meetings you used to ignore,
• You’re more open about being tired, and
• You casually mention succession, timing, or “what’s next.”

You think you’re just talking. You’re not.

Experienced buyers are always listening for triggers and signals:

• Urgency,
• Fatigue,
• Exclusivity,
• Optionality (or lack of it), and
• Time pressure.

By the time a formal process begins, many owners have already told the market more than they realize, and once that perception is set it’s hard or impossible to reframe.

Hard truth:

If selling is even a twinkle in your eye in the next few years, assume every strategic conversation, answering enquiries about you by customers, staff or vendors, shapes leverage whether you intend it to or not.

Mistake #2: Waiting Until You “Want to Sell” to Get Ready And Build Value

This one is incredibly common. Owners have higher risk tolerances than buyers, they are comfortable with maximizing prior investments. They often wait until it feels real before addressing:

• Customer concentration,
• Dependency on them,
• Weak management,
• Personal mental and financial preparation,
• Messy or tax focused financials, and
• Unclear positioning.

By then, buyers don’t see “opportunity.” They see risk. Buyers have a lower risk tolerance than prior owners, especially founders.

Seasoned acquirers don’t just buy performance. They price what could go wrong after you have gone. If that looks above their normal comfort level, they just walk and focus on one of your competitors.

The owners who get successful and premium outcomes ask a different question early:

“If I were buying this business, where and why would I dig in, and where would I discount it?”

Fixing those issues three years out often does more for value than growing revenue. Why, because it removes friction and uncertainty. Make your business easily buyable.

Mistake #3: Letting Buyers Decide What Business You’re In

Valuation is driven by category.

A company framed as:

• A people-dependent service is valued very differently than
• A systematized, scalable platform

One of the businesses cofounded was sold primarily because of the methodology and surety of the client results, rather than the significant pool of capable talent. They knew they could take our international presence and scale the methodology globally, and reduce the need for heavy skills competitors needed.

Rookie sellers tend to describe their business the way they see it operationally, not where it would scale, or go next strategically. They have lived the blood, sweat and tears, that took effort, navigated complexity, and all the customization thinking it demonstrates value.

Sadly, it does the opposite.

Buyers don’t just buy what your business is today. They buy what it can become inside their ownership structure.

If you don’t control the narrative, someone else will and you may not like the multiple they assign to it.

Mistake #4: Assuming You Know Who Will Buy Your Business

Many owners lock onto a “logical buyer” early:

• A competitor
• A private equity firm
• A known player in the industry

Then they subconsciously optimize everything for that outcome, often focusing just on Revenue and profitability factors.

Many businesses sell to buyers the owner never anticipated adjacent industries, financial buyers with a thesis and looking for their platform or foundation, or strategics looking for capability, location, and speed into a market rather than competing with you.

When you prepare too narrowly, you reduce optionality. Considering what are the non-logical assets that adjacent players, would value, are you big enough with a solid brand for financial buyers or do you own a location, industry or market segment that gives access.

The best exits keep multiple paths open as long as possible.

Mistake #5: Getting Seduced by a Friendly, Proprietary Deal

This one destroys more value than almost anything else. A significant portion of inbound interest is looking to catch an unprepared seller on a bad day. Some steadily ramp up the pressure to get married expediently using the adage “time kills all deals.” They know good businesses will be of interest to other parties and the price will go up.

It usually starts warm:

• “Just exploratory”
• “Let’s see if there’s a fit”
• “No pressure, just a conversation”

An Non Disclosure Agreement shortly follows, then comes a Letter of Intent with exclusivity.

Once you’re exclusive, leverage shifts. Dramatically.

Common rationalizations:

• “They’re serious.”
• “They’re spending real money.”
• “We can always walk.”

In theory, yes. In practice, momentum, fatigue, and sunk costs take over.

If key terms are vague going into exclusivity, they will be clarified after your leverage is gone. A good M&A Sell Side Attorney wants to get things as clear as possible before you announce your engagement to the family.

Mistake #6: Underestimating Experience Asymmetry

You will likely sell your business once. Buyers do deals for a living.

That asymmetry shows up in subtle ways:

• Comfort with silence,
• Willingness to delay,
• Language,
• Strategic ambiguity, and
• Emotional detachment.

Rookie sellers assume ambiguity is neutral.

It’s not. It preserves the buyer’s options while narrowing yours.

The mistake isn’t being inexperienced. It’s not compensating for it with structure, advisors, and preparation. An experienced advisor team knows the game and the unwritten rules of how it is played.

Mistake #7: Bringing Advisors in Too Late

Many owners hire M&A advisors after:

• Sharing financials,
• Granting access to key documents normally reserved for a data room,
• Floating price expectations, and
• Starting “serious” discussions.

At that point, much of the leverage has already been spent. Good advisors don’t just negotiate price. They manage:

• Narrative,
• Process,
• Timing,
• Emotional volatility, and
• Competitive tension.

Waiting too long means paying full fees for diminished impact.

Mistake #8: Abdicating Responsibility to Advisors

The flip side is equally dangerous. Some owners step back completely once advisors are engaged. That’s a mistake.

No one is as invested in the outcome as you are. Advisors manage portfolios of deals. You’re living inside one. The strongest exits happen when owners stay deeply engaged, asking questions, challenging assumptions, and staying emotionally aware, without trying to control every move.

It’s a balance that really matters.

Mistake #9: Letting Emotion Run the Show

Selling a business isn’t just financial, its deeply personal.

Pride, fear, exhaustion, frustration, identity, regret they will all surface at some point. Often unexpectedly.

Left unchecked, emotion shows up as:

• Overreacting to early offers,
• Fixating on symbolic issues,
• Shifting goalposts mid-process, and
• Self-sabotage disguised as “principle.”

One discipline that helps: define your aspirational, target, and walk-away outcomes before the process begins.

Those numbers and cultural elements aren’t for the buyer They’re for you especially when your judgment gets cloudy. The help your advisors keep you on track.

Mistake #10: Mishandling the First Real Offer

The first offer isn’t just about price. It’s about positioning. Some sellers bristle and shut down, others get visibly excited, both reactions leak information.

Experienced sellers plan their response in advance, not to react, accept or reject, but to shape what comes next.

The goal is never the first offer, it’s the second, third, and final one.

Mistake #11: Overplaying the Finish Line

Late-stage deals fall apart more often than owners expect. Why?

Because unresolved emotion surfaces as:

• Titles,
• Facilities, and Office space,
• Perks, and
• Minor terms with outsized importance.

These fights aren’t about economics. They’re about letting go. Buyers sense it. And when deals feel emotionally unstable, they walk.

Mistake #12: Misreading Silence and Pace

Silence is often strategic. Buyers may slow down, pause, or go quiet to test resolve.

Rookie sellers interpret this as disinterest. Strong sellers reset expectations early:

• Clear timelines,
• Defined next steps, and
• Mutual accountability.

Pacing only works as a tactic if you allow it to. If a buyer doesn’t like this it shows that they are either researching, were never going to buy, looking for bargains or that they don’t have experience of prepared sellers.

Mistake #13: Expecting a Clean, Linear Process

It won’t be. There will be delays, reversals, and moments of doubt. That’s normal. The process is drawn as a straight line, but it often resembles a roller coaster with twists, turns, highs, lows, and sometimes a surprise.

The sellers who struggle most are the ones who expect smoothness. The ones who do best expect turbulence and plan for it emotionally and strategically.

The Pattern Behind Almost Every Rookie Mistake

At the core, this isn’t about intelligence or effort.

It’s about preparation. Not just financial preparation but psychological and strategic preparation. The best exits aren’t won in the negotiation room. They’re earned years earlier through structure, clarity, and optionality.

And the biggest regret I hear from owners?

Not that they sold. But, that they didn’t prepare sooner, and the terms of the sale, the value left, confidence, and peace of mind that was all left on the table.