Synopses of Numbers 1 - 11 of 66 Obstacles to a Successful Business Sale
In the last issue (#23), we identified 66 Obstacles to a Successful Business Sale. This issue will provide brief Synopses of Numbers 1 – 11 of 66 Obstacles to a Successful Business Sale.
"In every difficult situation is potential value. Believe this, then begin looking for it." Norman Vincent Peale
Synopses of 1 to 11 of 66 Obstacles to a Successful Business Sale
To view the complete list of 66 obstacles, click on this article: Issue #23 – 66 Obstacles to a Successful Business Sale.
Following are brief summaries of obstacles 1 -11:
1) Business Owner's Failure to Plan for a Sale
This is definitely the #1 reason businesses don’t sell. With at least 66 obstacles to a successful sale, if you don’t spend adequate time and resources planning for a sale, it is not likely to be successful. This is the primary reason only about 20-25% of small businesses are ever sold. Read more in this article: Issue #56 – Business Owner’s Failure to Plan for a Sale.
2) Inadequate Seller's Discretionary Earnings (SDE)4
Because buyers need to make a reasonable living after paying debt service on their acquisition, businesses with less than $100,000 in SDE are not attractive to most buyers. In addition, they are next to impossible to finance through lenders. Read more in this article: Issue #57 – Inadequate Seller’s Discretionary Earnings.
3) Low or Inconsistent Gross Margins
If you’re only making the easy sales and not pushing your margins to the max, it will not reflect well on your bottom line. Low or inconsistent gross margins are one of the primary reasons small business owners do not have sufficient earnings to have a saleable business. Read more in this article: Issue #58 – Low or Inconsistent Gross Margins.
4) Inadequate Marketing and Sales Efforts
Most small business owners are “stuck in a rut” as it relates to their sales and marketing efforts and have significant room for improvement. Implementing new ideas can significantly increase earnings and make a business with inadequate SDE saleable. Read more in this article: Issue #59 – Inadequate Marketing and Sales Efforts.
5) Owners with Unrealistic Price Expectations
Overpriced businesses almost never sell and frequently result in an extremely painful process of realization for the business owner. What should be a joyous occasion often becomes the most stressful and emotional agony of an owner’s life. It doesn’t have to be that way, though. There is absolutely no good reason to attempt selling an overpriced business. Knowing the realistic value before deciding to sell is one of the most important planning steps. Read more in this article: Issue #60 – Owners with Unrealistic Price Expectations.
6) Business Acquisitions that Cannot be Financed
Obstacles to successfully obtaining lender financing tend
