Why Some Businesses Don’t Sell: The Top 10 Reasons

While most businesses go through a relatively successful transition, including an outright sale, some don’t sell without significant adjustments in price and/or terms.

Year after year national surveys yield the following top 10 reasons why some businesses don’t sell:

  1. The business is overpriced for the market.
  2. The business has several family members in top management.
  3. Business success is too dependent on the owner.
  4. One or more customers constitute over 25% of the business income.
  5. The business marketplace is diminishing or going through significant change.
  6. Business revenue is declining, possibly due to owner conduct, including absence.
  7. The seller has done little or no exit planning.
  8. The owner perks cannot be added back to EBITDA.
  9. The seller is not educated about the process, especially the time-consuming nature of due diligence.
  10. The owner does not have proper representation.

Addressing each of these issues in a straightforward manner will increase your opportunities to have a very successful transition with your business, including the honest appraisal of potential challenges.