Trusted Advisors: Avoid These Common Pitfalls When Preparing To Exit Your Business

Ideally, preparing for a business exit begins three to five years in advance, leaving ample time for careful planning and the alignment of strategies to successfully support the exit. But that time can fly by, and during the final 12-18 months before a sale, there are almost always pitfalls that can delay or even halt the process. Below are nine trouble spots to look out for leading up to a sale. If you can address them proactively, you can reap the rewards of a smooth business exit.

1. Insurance. Meet with your insurance broker well in advance of a sale to have your insurance policies reviewed. A lot of the negotiations in M&A deals center around who eats the loss if something bad that happened before closing comes to light after the deal is completed. With good insurance (general liability, directors and officers, product liability), depending on the policy, even if the buyer makes a claim against you, your pre-sale insurance may cover it.