Reported by Donna Fenn and Bruce G. Posner

Cashing Out;

 

Everybody likes to feel important, but -- when you are selling your company -- one of the worst mistakes you can make is to emphasize how essential you are to the business. "If the buyer thinks that the company can't be run without you, it becomes a lot less attractive," says Stan Sanderson, president of Geneva Corp., based in Costa Mesa, Calif.

That may seem obvious, but Sanderson, a man with nine years in the mergers and acquisitions business, says it is common for owners to undermine their own sales pitches by taking too much credit for a company's successes, and by exhibiting too much hands-on control. They often do it unconsciously, moreover -- stopping in the course of a plant tour, for example, to instruct employees on some detail of their work. A shrewd buyer, says Sanderson, will lower his offer accordingly. Sanderson's advice to sellers: downplay your role (difficult as that may be) and stress the abilities of your management team.