Business Brokering Buy Sell Business – Worldwide Business Brokers

Why Businesses Don’t Sell: Part 3

Why Businesses Don’t Sell: Part 3

12 September 2022: Why Businesses Don’t Sell: Part 3

In a post two weeks ago, I recapped an experience I had several years ago on a panel with eight or 10 other business brokers about why businesses don’t sell. Each of those professionals rattled off six or eight – or more! – reasons that they had experienced in their respective business brokering practices.

We ended up with more than two dozen reasons why, in the experience of these professional business brokers, businesses don’t sell.

But the surprising thing was that, though we had eight or 10 lists with seven or more reasons on each, three specific reasons appeared on every one of those lists. If you want to sell a business – your own or if you’re a broker representing a business owner – I would imagine that knowing the top three reasons businesses don’t sell would be pretty helpful. I know it has been for us.

And so, this is the final installment in our three-part series in which we discuss each of the top three reasons businesses don’t sell. Two weeks ago, we tackled the Number 1 reason: price in relation to value. Last week’s post was about reason Number 2: representation. This post is about reason Number 3: crummy documentation


We offer a comprehensive coaching program  – both group coaching in our Brokers’ Roundtable community as well as one-on-one coaching – tailored to Realtors, business owners , buyers and anyone interested in valuing, buying or selling a business.

If you’d like to learn more, email me at jo*@Wo*******************.com


Why Businesses Don’t Sell: Crummy Documentation

Documentation – detailed financial records, executed contracts, complete organizational documents, current employee records; everything from monthly revenue statements and the true ownership of all the assets used by the business to who’s got what vacation time banked – must be current and accurate.

Our job – both us as brokers and, more specifically, our selling clients – is to make the selling process as smooth as possible. (Spoiler alert: Selling a business isn’t like selling a bagel. It’ll never be totally painless.)

A major component of that process is the buyer’s due diligence, a procedure and undertaking that can be relatively smooth and straightforward or excruciatingly invasive. For most small business owners, it’s usually the latter because little attention has been paid over the years to what a buyer will need to determine if the business on offer is worth the buyer’s life savings.


Our course, “Learn How to Value and SUCCESSFULLY Sell Businesses, teaches you how to accurately value and successfully sell businesses.

Don’t Miss Out on the ComingSilver Tsunami“!

Justification of Price

There’s probably a dozen or more posts on this blog underscoring the importance of, first, the need for a valuation and, second, the price asked for the business. Yes, many businesses – especially larger ones – are brought to market without a stated price. In such cases, we identify potential buyers, provide the information and request bids. But most small and lower middle market businesses – those with revenue of, say, $10 million or less – are usually brought to market with an “asking” price.

Value Driving ResultsWe have to justify that price to any buyer. The initial way we do so is to establish the business’ value for the buyer. Then we have to prove that value. Proving value is a function, in no small part, of the buyer’s due diligence.

When we represent a business, we prepare a thorough Offering Memorandum – essentially a “book on the business” – that is intended to answer all of a buyer’s questions so that the due diligence period is fundamentally an exercise in confirmation; the buyer basically confirming the accuracy and completeness of the data, history and current status of the information presented in the Offering Memorandum.

If the buyer discovers information during their due diligence that’s at odds with either what’s in the Offering Memorandum or what the seller or broker has stated – or if information is missing from the Offering Memorandum – a buyer’s natural inclination is to look at any inaccurate, incomplete or missing data as a sign of duplicity – that the seller is hiding something – and begin to discount the business’ value in anticipation of finding additional undisclosed matters or inaccurate numbers or statements.

Make It Easy For the Buyer

We – brokers and our selling clients – need to make it as easy as possible for a buyer to buy.

The buyer of a business has three main concerns: understanding how the business runs and makes money; establishing a fair value/price for the business and; how to structure the acquisition, including financing and tax issues (which, not coincidentally, factor into the value/price calculation).

The first two of those concerns are addressed during the due diligence period and are fundamentally impacted by the accuracy and completeness of the data we provide, both in the Offering Memorandum and the subsequent requests for additional information and Q&As. If the information we provide is accurate – and confirmed by the provision of documentation – and we’ve established a value supported by the data, we’re much more likely to earn the trust of the buyers and much less likely to raise any suspicions that will result in a lower valuation in the mind of those buyers.

The Bottom Line

One of our in-house mantras is to make the process of buying as easy for the buyer as possible.

Yes, we want to make the selling process easy for the seller, our client but – and perhaps not surprisingly – starting from the end of the process – making it easy for the buyer to buy – generally makes it easier for the seller to sell.

We’re going to have to provide all the details at some point in the process. Unless the seller has something to hide (see two posts on unethical sellers), why wait to be asked?

Transparency and full disclosure: If you have a serious and capable buyer, both will eventually be required. Waiting to be asked for pertinent information only raises a buyer’s suspicions and lowers the buyer’s confidence in the accuracy of what we’re providing. That, in turn, usually lowers what the buyer is willing to pay for the business. After all, once they get to that point, the buyer will not be completely confident that all the skeletons have been revealed. 

Transparency and full disclosure are the hallmarks of honest sellers and ethical business brokers. Get the info on the table and establish a justifiable value. Make it easy for a buyer to buy.

I’d like to hear from you. What topics would you like me to cover? How can we tailor these posts to be more useful to you and your business. Let me know in the comments box, below, or email me at jo*@Wo*******************.com.

If you have any questions or comments on this topic – or any topic related to business – I’d like to hear from you. Put them in the comments box below. Start the conversation and I’ll get back to you with answers or my own comments. If I get enough on one topic, I’ll address them in a future post or podcast.

I’ll be back with you again next Monday. In the meantime, I hope you have a safe and profitable week.


Searching For…

A middle America-based investment company has contacted us about acquiring general dental practices and related businesses – such as oral surgeries and associated labs – in Indiana, Kentucky, Tennessee and Mississippi.

If any of you know of something that might fit, please let me know.


#business #businessacquisition #sellabusiness #becomeabusinessbroker #businessbrokering #businessvaluation #MergersandAcquisitions #buyabusiness #sellabusiness #realtor #realestateagents


The author is the founder, in 2001, of Worldwide Business Brokers and holds a certification from the International Business Brokers Association (IBBA) as a Certified Business Intermediary (CBI) of which there are fewer than 500 in the world. He can be reached at jo*@Wo*******************.com

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