In many cases, a tentative agreement on a business sale seems promising, only to fall apart later. Understanding why this happens can help you avoid the most common pitfalls.

A survey of business brokers across the USA and Canada revealed recurring issues that often lead to deals falling through. These issues form a clear pattern, highlighting several key factors that can affect the outcome of a business sale.

Here are four critical factors that can derail a business sale:

1. Seller’s Failure to Disclose Problems
   When a seller withholds information about the business’s issues, these problems don’t disappear. They typically resurface after a tentative agreement has been made, jeopardizing the deal.
2. Buyer’s Doubts About the Price
   A buyer might agree on a price initially but later question whether the business justifies that valuation. If the buyer believes the business is not worth the agreed price, the deal is at risk.
3. Impatience from Both Parties
   The selling process can lead to impatience from both buyers and sellers. Buyers may demand more information, while sellers may become frustrated with the prolonged process. It’s crucial for both sides to recognize that closing takes time, but not so much that it threatens the deal. Engaging knowledgeable professionals who understand the closing process can help.
4. Seller’s Uncertainty About Selling
   Often, sellers may not truly want to part with their business. The decision to sell can be emotionally challenging, especially if the business represents a significant part of the seller’s life work. It’s important for sellers to be certain about their decision to sell before entering the market. Any doubts should be addressed beforehand.

Final Thoughts
To increase the chances of a successful business sale, focus on:

• Establishing good rapport between the buyer and seller.
• Ensuring mutual understanding of the terms of the agreement.
• Recognizing and addressing the emotional aspects for both parties.

By considering these factors, you can help ensure a smoother and more successful transaction.

Working with an experienced merger and acquisition advisor, like EastWind Business Solutions, is one way to test the waters. You may determine that now is the perfect time to sell your business.

Many factors are involved in selling your business and influence when and how you approach such a sale. A skilled M&A advisor can help you look at the overall picture, as well as your unique situation, and determine when it is the right time to sell.