1. Not knowing the "real" worth of the business. Although the marketplace may ultimately determine the final sale price of a business, an owner needs to know the value or worth of his or her business before placing the business on the market. Not knowing the answer beforehand is one of the most costly errors a business owner can make. Before making the decision to sell, owners should work with someone qualified to place a value on their company.

2. Not preparing the company for sale. A company is certainly not a house, but the same attention to appearance prior to sale is necessary. Financial and legal affairs should be current. Anything a potential purchaser might want to see should be up-to-date, accurate and available for review. To ensure that the business is comprehensively presented and to avoid mistakes, a document known as a selling memorandum should be prepared. This takes time on the front end but will save countless hours once the process begins.

3. Not being able to see the business through the eyes of a buyer. It is only natural to see one’s own company in the most favorable light and overlook the inherent blemishes or problems that exist. Sellers have to approach their company realistically, knowing that a potential buyer will be doing the same. Sellers who recognize the deficiencies of their business are in a much better position to deal with the concerns of the buyer. In fact, the best way to handle any potential problems is to bring them up, yourself, in the very beginning. Remember that buyers want to see solid management, good earnings and growth — and they expect to be purchasing the future, not the past.

4. Not really knowing the buyer. The better you know the buyer, the smoother the transaction. The more a seller knows about the buyer’s motives, interests and background, the better-equipped a seller is to make informed decisions about whether that individual is the right person to operate the business. When final negotiations begin, knowing the buyer can help resolve some of the issues that will arise. The more you know about why a buyer wants to buy your company, the easier it is to determine when to be firm in the negotiations and when to be flexible.

5. Trying to sell the company to a buyer who doesn’t want to buy. There are usually many more potential buyers than there are companies for sale. The question is — how serious are they? A buyer may indicate a great deal of interest, then back out of the deal when it gets down to the wire. Some buyers want to buy only on their terms and conditions, some may have too many decision-makers to please, and others only want to buy the "perfect" company. Wasting time on people who aren’t serious about purchasing a company takes valuable time away from those who really do want to buy.

6. Thinking no one knows more, or better. Many business owners feel that no one knows their business as well as they do. As a result, they think they can do a deal by themselves. They think they don’t need any help. They believe they are lawyers, accountants, investment bankers and outside advisors, all rolled up into one person. Then, when the going gets tough, they become impatient and inflexible. They blame others -- usually the buyer -- when the deal blows up. As the old saying goes: "The attorney who represents himself has a fool for a client." The same could be said for the business owner who thinks he can sell his own company. Not using outside advisors is a serious mistake.

7. Not understanding the structure of the deal. Here is one scenario: An offer is presented; the seller takes one look at the price, immediately says "no" and refuses to look any further. In fact, the price, within reason, is immaterial. The real crux of the deal is how it is structured. Consider the negotiating axiom "You can name the price if I can name the terms." The terms and conditions are important. A seller may be ecstatic about price only to find that the devil is in the details.

8. Not being able to walk away from the deal. Too many sellers get so involved trying to put a deal together that they don’t see the big picture. They don’t realize that the deal isn’t a good one and doesn’t serve their interests or those of their company. In other words, it’s time to walk away from the deal and go on to the next opportunity. Since the seller has invested a lot of time and effort, and probably expenses, oftentimes he or she doesn’t want to let the deal get away. However, if the deal isn’t right -- and can’t be fixed -- there is no other choice. Much better not to do the deal then to do a bad one!