Synopses of Numbers 12 - 22 of 66 Obstacles to a Successful Business Sale
In the last issue (#25), we provided short Synopses of Numbers 12 – 22 of 66 Obstacles to a Successful Business Sale. This issue will provide brief Synopses of Numbers 23 – 33 of 66 Obstacles to a Successful Business Sale.
"A desire can overcome all objections and obstacles." Gunderson
Synopses of Numbers 23 - 33 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 23 – 33:
23) Losing Focus - Business Decline during Sale Process
Some owners “check out,” lose focus, or become too distracted during the process of selling. If profitability drops after the business is put up for sale, only two things can happen: the business value decreases and you sell for less, or you can no longer afford to sell the business at its reduced value. Read more in this article: Issue #80 – Losing Focus – Business Decline during Sale Process.
24) Lack of Flexibility in Negotiations
In final negotiations, every transaction comes down to a few unresolved differences. Patience, open communications and understanding the other party’s needs are important factors in resolving conflicts. Read more in this article: Issue #81 – Lack of Flexibility in Negotiations.
25) Sellers' Lack of Emotional Control
Emotions arise several times throughout the business sale process, including making the decision to sell, negotiating to acceptable offers, during due diligence and in drafting the final definitive documents. The key to managing your emotions is adequate planning for and understanding of the business sale process and recognizing there will be contentious issues. Read more in this article: Issue #82 – Seller’s Lack of Emotional Control.
26) Sellers Don't Understand Buyers' Motivations
Risk aversion is a major factor in buyers’ decision-making. Sellers need to appreciate how important that motivator is and prepare for buyer meetings accordingly. Read more in this article: Issue #83 – Sellers Don’t Understand Buyers’ Motivations.
27) Owners Don't Sell Business' Growth Potential
Buyers want to know you understand important metrics in your business, and they want to know what can be done to make the business grow. Advance preparation for buyers meetings is one of the keys to a successful sale. Read more in this article: Issue #84 – Owners Don’t Sell Business’ Growth Potential.
28) Difficulties Transferring the Facility Lease
To some extent, this is one of the most problematic obstacles to a business sale because so much is beyond your control. However, it’s extremely important to be knowledgeable of the terms of your facility lease and to control as many aspects as you can. Read more in this article: Issue #85 – Difficulties Transferring the Facility Lease.
29) Real Estate Transfer Issues
Commercial real estate values are much more difficult to ascertain than residential real estate values, and the value of your business is dependent on the value of the real estate it occupies. It’s important to obtain a professional commercial real estate appraisal before putting your business on the market. Read more in this article: Issue #86 – Real Estate Transfer Issues.
30) Bad Timing - Waiting too Long to Sell
The most common timing mistake business owners make is trying to hold on and turn around declining results when they don’t really have the enthusiasm or mental drive to make it happen. Read more in this article: Issue #87 – Bad Timing – Waiting too Long to Sell.
31) Confidentiality Breach and Employee Suspicion
A breach of confidentiality can have significant negative effects on your employees, customers, suppliers, competitors, lenders and buyers. It can kill a pending deal and/or preclude you from being able to sell your business. Read more in this article: Issue #88 – Confidentiality Breach and Employee Suspicion.
32) Lack of Required Approvals from Stakeholders
If you do not discuss your sale intentions and the approval process with partners, shareholders, franchisors, manufacturers (in an exclusive distributorship relationship) and/or your spouse before putting your business up for sale, it will almost certainly come back to haunt you. Read more in this article: Issue #89 – Lack of Required Approvals from Stakeholders.
33) Unproductive Assets
Buyers will not pay extra for unproductive assets like obsolete inventory or excess furniture, fixtures and equipment. In addition, the unproductive assets create a negative image of the business. Read more in this article: Issue #90 – Unproductive Assets.
"The mere fact that you have obstacles to overcome is in your favor..." Robert Collier
Overcome the Power of Inertia
Overcome the Power of Inertia and call a business broker for a free consultation. Many brokers offer no-charge, no-obligation evaluations of small businesses. They can provide a broker opinion of value and help you identify obstacles to a successful sale as well as opportunities for improvement to increase the value of your business. That is a great way to start planning for a successful and profitable exit from your business.
