Three Common Errors Caused by Inexperience

By Michael D. Rubin, CEO & Founder · Updated September 2026 · 732 words

The three errors inexperience causes most often in a company sale are sharing information without confidentiality agreements, sending buyers financials that are incomplete or unreconciled, and keeping the finance lead out of the process until buyers demand to meet them. Each seems minor at the time. Together they can leak the sale, lower the offers and stall diligence.

They are especially common when an owner hands the sale to someone capable but untested, such as a family member with a business degree, a trusted office manager or a general-practice attorney, to save the cost of an advisor.

A familiar scenario

Picture a founder in his sixties with a profitable company doing several million dollars a year across a few locations. He meets an experienced sell-side advisor and likes what he hears. Then a relative with a fresh MBA offers to run the sale herself and save the fee. She is bright and hard-working, and she has never sold a company. The owner agrees, reasoning that he can always bring in help later if things go wrong. Within months, three problems appear.

Eager to find buyers quickly, the family team sends a description of the company to friends of friends, a few competitors and a listing site, without asking anyone to sign a non-disclosure agreement (NDA) first. Word travels. A supplier asks about credit terms, two key employees start interviewing elsewhere, and a competitor tells shared customers the company is changing hands. That is error one, and the sale now has a leak to manage before it has a buyer.

Fixing error one: a controlled release of information

The fix is procedural. Buyers first see a blind profile that does not name the company. Anyone who wants more signs an NDA and provides a financial profile showing they can fund the purchase. Identifying details are then released in stages, with the most sensitive items, such as customer names and pricing, saved for the final stages. Keep a log of who has signed and what each party received, and give buyers a single contact for questions so nobody calls the company directly. The guide on how to sell your business confidentially walks through each step.

Error two: financials that do not hold up

The relative builds an offering memorandum from internal reports that were never reviewed or reconciled to the tax returns. Several hundred thousand dollars of the owner's personal spending and family salaries run through the company each year, but nobody mentioned it to her, so the add-backs are missing and earnings look lower than they are. Elsewhere, figures in the memorandum differ from the statements a buyer later asks for.

The damage runs both ways: offers come in low because earnings are understated, and the buyers who stay lose confidence when the figures do not match. It also leaves the owner defending numbers he did not prepare. An experienced advisor prepares a financial recast, reconciled line by line, before any buyer sees a number.

Error three: leaving the finance lead out

The company's controller, the person who actually knows the numbers, is kept in the dark to protect confidentiality. When diligence starts, buyers want to meet that person and expect quick, consistent answers. Instead, questions go through the relative, answers take weeks, and the controller learns of the sale from a buyer's request and is understandably unsettled. Bringing the finance lead in early, under a confidentiality agreement and often with a stay bonus, avoids all of this. Our answer on which advisors belong on your sale team besides the M&A firm explains who else to involve and when.

None of these errors comes from a lack of intelligence. They come from not having done it before. Experience also shows in negotiation: knowing which terms are normal, which are worth a fight and when a buyer is bluffing. When comparing advisors, ask how many sales they have closed and in what size range, who will be in the negotiation, and what you owe if the company does not sell.

How MDR & Associates brings that experience

MDR & Associates has closed more than 250 transactions since 2008, with a success rate of over 90%. A principal of the firm is in every negotiation, and our fee is 100% performance based: an industry-standard success fee only if and when the company sells. See our results and fees, then contact us for a confidential conversation.

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Questions owners ask next

Can a family member help with the sale at all?

Yes, in the right role. A relative who knows the company can gather documents, answer operating questions and support the owner through a stressful process. The risk comes when they run the marketing, buyer screening and negotiation without experience. Let them help the advisor rather than replace one.

What if news of my sale has already leaked?

Act quickly and calmly. Speak to key employees, and if needed to major customers, with one consistent message, and have your advisor tighten the process so no more identifying information goes out without a signed NDA. A leak is harder to manage once rumors spread, so do not wait to see whether it fades.