A little secret about the M&A and Business Broker business. It is estimated a minimum of 25% and a maximum of 75% of all businesses which go to market NEVER sell. Whatever the real figure is, why do some businesses not sell. From Empire’s 11 years in the industry, our experience leads us to believe these are the Top Ten Reasons;
1. The owners expectation for the value of their business is much greater than a real world valuation.
2. The owner is the main person in the business with little or no management team to support the business if something happens to the owner.
3. The business has a high concentration of revenues in 1-2 two customers.
4. Several family members are part of the business.
5. The business is in a space (industry) which is changing
6. Revenues are declining and the owner claims it is because he is slowing down.
7. Owner takes many perks from the business which are not really “add backs”.
8. Owners are unfamiliar with the selling process and are not prepared for the due diligence.
9. The owner has taken the steps necessary to plan for an exit strategy.
10. Owner did not realize the value or consult with a trusted M&A advisor or Business Broker prior wanting to sell.