Why a business doesn’t sell
Posted on October 22, 2018
Not every business listed for sale will be successful in finding a buyer. Some trade groups have stated that less than 10% of businesses that are listed “For Sale by Owner” will sell. These same groups claim that businesses listed with Business Brokers will have a 50% probability of selling which is 5 times the rate of success. I have identified 9 reasons businesses fail to sell. A seller can raise their probability percentage of selling their business by addressing these items.
Here are the top 9 reasons businesses don’t sell;
1. Unrealistic expectations – Owners do not know what the realistic value is of their business and what they can expect a buyer to pay for it.
2. Inadequate financial reporting – Inaccurate or incomplete books and records are kept. Buyers are willing to pay based on the numbers that they can verify.
3. Lack of consistent revenue stream – Sales and profits are on a downward trend.
4. Business atmosphere – The business market is changing, and the owners have not reacted to the changes.
5. Customer concentration – A large percentage of the business is derived from a single customer.
6. Owner dependency – The owner is the business.
7. Credibility – It is perceived that the sellers are not honest about the business or its success.
8. Partners – There may be partners that have different goals.
9. Taxes – The seller is unaware about the tax implications of selling a business.
Buying or selling a business is a very involved process. If you are considering buying or selling a business, I would suggest a meeting with a Business Broker. I welcome you to contact Central Florida Business Brokerage at info@CFBB.biz or call us at (407)261-9001.