The mistakes that cost Singapore owners the most
Eight errors that show up directly in the final price, and what to do instead.
By Eric Ong Updated 6 min read
Every one of these is common, and every one of them is avoidable.
Negotiating with a single buyer
An unsolicited approach is flattering and it is the weakest position you will ever negotiate from. Without an alternative in the room, every concession is one-way. If someone has approached you, that is the moment to run a process, not to skip one.
Going to market unprepared
Messy accounts and missing paperwork do not just slow diligence. They hand the buyer a documented reason to re-price after you have emotionally committed to the deal.
Confusing owner income with business profit
Until personal expenses, above-market or below-market director salary and one-off items are separated out, nobody knows what the business actually earns, including you.
Being indispensable
If the business needs you, the buyer is not buying a business. They are buying a job that depends on you staying, and both the price and the structure will say so.
Overstating the add-backs
Adding back the owner salary without deducting a replacement manager’s cost is the classic. The buyer’s accountant finds it immediately and then re-checks every other figure you have given them.
Letting the deal go quiet
Momentum is an asset. A buyer with an unanswered question for three weeks starts wondering what else is slow. Enthusiasm has a half-life.
Signing a term sheet you have not read properly
Exclusivity length, earn-out mechanics, warranty periods, what counts as a material adverse change. All negotiable before you sign, almost none of it afterwards.
Telling the team too early, or too late
Too early and you risk losing people before there is a deal to lose them over. Too late and the buyer inherits a team that feels ambushed. Plan the announcement as part of the transition, with a date and a script.
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Common questions
What is the most common mistake owners make when selling?
Going to market unprepared. An owner who starts the process while the accounts are still messy and the business still depends on them personally will meet every one of those problems again during diligence, at the point where a buyer has the most leverage and the seller has the least. Preparation moves those conversations to a time when you still control them.
Is it a mistake to sell to the first buyer who approaches?
Usually, unless you have tested the alternative. A single buyer negotiating alone sets the price, the timetable and the structure, and has no reason to improve any of them. Running a proper process is not about being difficult; it is about finding out what the business is worth to more than one party before you accept a number.
Should I set an asking price?
Generally no for a business of this size. An asking price caps what you can receive and anchors the negotiation before a buyer has understood the business. Letting qualified buyers form their own view, then comparing offers on structure as well as price, produces a better outcome more often than naming a number first.
What do sellers most often regret afterwards?
Focusing entirely on the headline price and not enough on the structure. How much is paid at completion, what the deferred portion depends on, how long you are committed to stay and on what terms. Two offers with the same headline number can differ enormously in what actually reaches you and when.
Read next
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How Singapore SMEs are valued
Adjusted EBITDA, sector multiples, and the bridge from enterprise value to the money that reaches your account.
Succession planning for Singapore SME owners
Family succession, management buy-out, trade sale or staged exit. How to choose, and how early to start.
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