Top 33 Obstacles to a Successful Business Sale
In Issue #54, we provided information About Professional Business Valuations. In this issue we will identify the Top 33 Obstacles to a Successful Business Sale.
"By prevailing over all obstacles and distractions, one may unfailingly arrive at his chosen goal or destination." Christopher Columbus
Top 33 Obstacles to a Successful Business Sale
The overriding reason businesses don’t sell is failure of the owners to plan their exit strategy, which results in failure to identify the obstacles to a successful sale. If the obstacles in a specific situation are not identified and adequately addressed, the business owner is highly unlikely to successfully sell or exit his or her business with the desired financial security.
The top 33 obstacles are listed below, to some extent, in order of the frequency the obstacles are encountered:
1) Business Owner’s Failure to Plan for a Sale (Issue# 56)
2) Inadequate Seller’s Discretionary Earnings (SDE) (Issue #57)
3) Low or Inconsistent Gross Margins (Issue #58)
4) Inadequate Marketing and Sales Efforts (Issue #59)
5) Owners with Unrealistic Price Expectations (Issue #60)
6) Business Acquisitions that Cannot be Financed (Issue #61)
7) Owners Unwilling to Provide Partial Financing (Issue #62)
8) Owners Who Cannot Afford to Sell (Issue #63)
9) C-Corporation Tax Implications (Issue #64)
10) Inadequate Recordkeeping / Accounting Systems / Financial Reports (Issue #66)
11) Inadequate Second-Level Management (Issue #67)
12) Customer Concentration Issues (Issue #68)
13) Asset Value too High vs. Return on Investment (Issue #69)
14) Real Estate Value too High vs. Return on Investment (Issue #70)
15) Large Working Capital Requirements (Issue #71)
16) Excessive Personal Expenses and Skimming Cash (Issue #72)
17) Burned-Out Owner Ruins Business Value (Issue #73)
18) Owners Who Try to Sell the Business Themselves (Issue #74)
19) Owners Who are not Committed to a Sale (Issue #75)
20) Choosing the Wrong Intermediary (Issue #76)
21) Trust Issues from Inadequate Disclosures before Due Diligence (Issue #78)
22) Inadequate Preparation for Due Diligence (Issue #79)
23) Losing Focus – Business Decline during Sale Process (Issue #80)
24) Lack of Flexibility in Negotiations (Issue #81)
25) Seller’s Lack of Emotional Control (Issue #82)
26) Sellers Don’t Understand Buyers’ Motivations (Issue #83)
27) Owners Don’t Sell Business’ Growth Potential (Issue #84)
28) Difficulties Transferring the Facility Lease (Issue #85)
29) Real Estate Transfer Issues (Issue #86)
30) Bad Timing – Waiting too Long to Sell (Issue #87)
31) Confidentiality Breach and Employee Suspicion (Issue #88)
32) Lack of Required Approvals from Stakeholders (Issue #89)
Clicking on the links above will transfer you the newsletter issue dedicated to the obstacle described in its title.
66 Obstacles to a Successful Business Sale
In Issue #23 we previously covered 66 Obstacles to a Successful Business Sale and had a one paragraph explanation of each obstacle in Issues #24 – #29. Click to read: Issue #23 – 66 Obstacles to a Successful Business Sale. The first 33 obstacles in Issue #23 are the same as the top 33 obstacles listed above. We felt the top 33 were worthy of an issue dedicated to each obstacle.
Can All Obstacles be Overcome?
With proper ……..
