This month, we are delighted to include a guest post from Jock Purtle is a successful internet entrepreneur who advises on buying and selling online businesses.

When it comes to building a business, most entrepreneurs want to set themselves up for the day they can cash in on their hard work and sell their business to another investor.  Even though they know that they want to sell long before they reach the point where they can get an investor to take over, many entrepreneurs are still making grave mistakes that can cost them big when it comes time to start negotiating the deal.

Below are 5 of the most common mistakes entrepreneurs are making, and how you can avoid making them yourself if you think that you’ll want to exit your business in the near future, or prepare yourself for a profitable exit down the road.

1 – Hiding or being misleading about key information.

Investors are going to dig into your business, and if you’re giving them inaccurate information they will uncover it and you’ll be left with egg on your face, and a deal that falls through.  Avoid trying to make your business look more attractive than it actually is, or embellishing the information you’re providing to investors.

While you do want to maximize the value of your business, and make sure your offer is attractive, you want to avoid resorting to shady tactics and misleading practices to make that happen.

2 – Not knowing their real numbers. 

This touches on providing misleading information, whether you present that misleading information knowingly, or not.  Misrepresenting your expenses or your own salary that are far higher than what the standard market rate calls for can cause your deal to fall flat.

Once your investors are performing due diligence, based on a valuation that you have provided them, they’re going to uncover the fact that you’ve hidden numbers or that your salaries are far higher than what they should be.

3 – Overvaluing their business.

While it’s good for you to see the value in your business, and thinking highly of your business can help you articulate that value to potential investors, many entrepreneurs get far too optimistic about how their business is performing in the market, or what it may actually be worth to those investors.

It’s critical that you remain realistic when you’re entering into negotiations, both in terms of what your business is actually worth, and what you’re really willing to accept for an investor to acquire the business from you.

Do your research before you enter into the deal to ensure you are maintaining realistic expectations.

4 – Waiting until it’s too late to sell.

There are good times to sell, and bad times to sell.  When your business has stabilized after an upswing in revenue, you’ll want to start thinking about selling.  After your business has gone through a downward trend?  Hold onto it.

This goes for offers that you’re receiving once you have initiated the sales process, as well.  If you get a good offer, don’t turn it down just because you want to stick it out in hopes that a better offer will come along.  Most times, it won’t.

5 – Trying to negotiate the deal themselves.

While it may be possible to sell your business by yourself, this creates the potential for you to waste your time, energy, and even your money.

If you want to get the deal done quickly and get the highest asking price possible structure the deal with a broker on your side.  They can tap into their own network of investors and help you plug the leaks in your business that could cause your valuation to slip.

About the author: Jock Purtle is a successful internet entrepreneur who advises on buying and selling online businesses.