Tomáš Demo revealed the most common mistakes when selling companies. Don’t do them yourself!

Selling a business is not just a question of price. Many entrepreneurs think that they just need to find a buyer, agree on an amount and sign the contract. In reality, however, business sales often fail because of poorly set expectations, unpreparedness or underestimation of the details that determine the success of a deal.

Tomas Demo, co-founder and partner of Highgate Group, has more than 15 years of experience in mergers and acquisitions. He knows what causes unsuccessful transactions and how they can be avoided. If you’re looking to sell a business, this is definitely something you should know as well.

Why Slovak entrepreneurs are not as successful in selling their companies as foreign ones?

Unlike foreign companies, where sales are a normal part of business, Slovak entrepreneurs often sell a company for the first and last time in their lives. And this is a problem. “Most owners have no experience with sales and have no idea what it all involves. Therefore, they often rely only on their intuition, which can be a big mistake. In foreign countries, most sellers are more experienced and know that you can’t do it without expert advice,” Demo explains.

What is the biggest problem when selling a company?

The sale of a company can fail due to a variety of factors, but one of the most common is too high an expected price. “Many entrepreneurs have a subjective idea of the value of their company, which often does not correspond to reality. They imagine the amount they would like, not the amount the market is willing to pay,” Demo says. Ideally, you should have your company valued by a professional before you start negotiating with investors. That way, you set realistic expectations and avoid unnecessary disappointments.

Selling a business is not just about price. What else makes the difference?

Entrepreneurs often focus only on the amount they receive for the company. But that’s only one part of the deal. “The biggest challenge is to prepare for all the terms of the sale – not just the price, but also what liabilities the buyer will reserve, what post-sale risks the seller will bear, and what all will be part of the transaction,” Demo points out. If you underestimate these details, the sale may be complicated or ultimately not happen at all.

Advice that every seller should follow?

A common mistake is too much pressure to close a deal quickly. “If you try to sell the company at any price and postpone the discussion of sensitive issues until later, it very often leads to the failure of the transaction at an advanced stage. The parties have already spent a lot of money and time, but in the end they don’t agree on the key terms,” Demo explains. It is therefore always important to communicate expectations with the buyer and agree on the key terms of the sale as early as possible.

Selling a business is one of the biggest decisions in business. That’s why it’s crucial to be prepared. Want to know more about this topic? Tomáš Demo will be one of the keynote speakers at the largest Slovak conference on selling and investing in companies, which will take place on 13 March 2025 in Bratislava.

Make sure the sale of your business goes well.

Reserve your place at the conference today!