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