Five Reasons You Won’t Sell Your Business – An Open Letter to Business Owners

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Dear Business Owner,

You have done so many right things. With tremendous effort you have built a business from the ground up. Your business success has given you much; respect in your community and industry, a comfortable lifestyle for you and your family, and an expectation that you will someday sell your business and provide yourself with a comfortable retirement and a measure of financial security you will pass on to your children and grandchildren. But be cautious. Many before you have begun the exit process only to have their expectations smashed. Some business brokers say that as few as 5% of the businesses listed for sale ever actually sell.  With an estimated 12 million privately held businesses owned by baby boomers, the statistics could get even more grim in the coming years. But why is it that 19 of 20 businesses fail to find a buyer? How could it happen to you?

Your business depends too much on you 

Like many business owners, you have retained too many critical responsibilities. If you are the only person in your company who performs an essential function, it makes your business unsaleable. A buyer wants a business that will run at full speed from day one. If you prepare all the bids, or design all the products or perform key technical work, the buyer won’t be able to operate without you. This is also true if your employees, or customers or critical vendors are loyal to you personally and not to your business. No buyer will pay for value leaving with you. Ask yourself the following question, if you disappeared today and were unable to contact your business for a month, what functions could your staff not handle? Would there be anything left of your business 30 days later? If you have to answer no to the last question, you won’t sell your business.

Your business does not have a compelling story 

Every successful business offering has two components, the numbers and the story. Both are critically important. The numbers include your financial results over time. They show a buyer your profit and growth to date. In most deals the numbers set the baseline for the pricing calculation. But profitable numbers cannot stand alone. Potential buyers want to understand whether your business can sustain and increase its profitability in the future.  The story provides that information. Your business story explains your company’s unique value proposition, the vibrancy and growth potential of your market, the special capabilities that your business offers its customers and your competitive environment and why your business thrives in it. But, if your market is shrinking, if fierce competition is squeezing your margins, if your technology is out of date, if your location has lost its lustre or any of a number of factors that would make a buyer question your company’s ability to grow and thrive, buyers will lose interest regardless of the numbers. You won’t sell your business. 

You lack data to support your story 

Nearly any deal will involve a due diligence process. In due diligence, the buyer, or more likely a third-party firm specializing in due diligence will go through an extensive process to validate your financial numbers and the claims you make in support of your story. The process is invasive, sometimes it borders on humiliating, but it is unavoidable. The buyer, and especially the buyer’s financing source want to make sure that the company you present them is the company they are actually buying.  If your supporting information can’t show buyers detailed sales history, detailed cost history, customer concentration, vendor concentration, inventory valuation, support for expenses, competitive factors, tax compliance and dozens of other factors, they will be compelled to walk away. You won’t sell your business. 

Your business hides a land mine that will blow up in due diligence 

You have an obligation to disclose to your buyer any potential issues that might affect the value of the business going forward. Clearly the deal will fall through if you deliberately try to hide material issues from the buyer. But even when you believe you have disclosed everything, issues you might not have considered, or thought immaterial can jump up and scuttle the deal. I personally have seen deals blow up over differences in inventory valuation, key customers in financial difficulty, sales tax compliance (currently a very common due diligence issue), festering employee problems, restrictive provisions in important sales or vendor contracts, etc. This list just scratches the surface. If any of these issues arise, at best your buyer will come back with a reduced price, at worst you won’t sell your business.

Your unrealistic expectations or suspicion/hostility toward the potential buyer will scuttle the deal

I get it, this business is your baby. Your personal standing and self-esteem are tied deeply to your perception of the business. In a way, the offered price seems to put a value on you personally. Due diligence seems like a bunch of smart-ass MBA’s calling your baby ugly. I understand your feelings, but you are going to have to get past them in order to sell. The true value of your business is defined by a buyer’s willingness to pay. The value doesn’t go up just because you perceive it’s worth more than that. You might think that the process demeans you, but you can’t take it personally. Your buyer is most likely following the standard process that all sellers face. If you allow it to eat you up and destroy the relationship between you and the buyer, the deal will eventually sour. You won’t sell your business. 

So, what to do? 

If you want to overcome the statistics, then you have to be intentional about selling your business. If you’re serious here are two things you should do:

  • Commit to the sale process. At times, it will seem like selling your business is a second job, and in truth, it is. You will need to take the challenges above head-on and deal with them directly in order to get a successful sale. I suggest you read The Exit Strategy Handbook, by Jerry Mills, Founder and Managing Partner of B2BCFO®. By the time you finish you will have a much clearer idea of the magnitude of the challenge you face. It’s available at and at
  • Get help. A successful business sale requires a team of experts from inside and outside your company and it requires active management of the preparation process. B2BCFO® Partners have the expertise to orchestrate the exit process, identify and build your Success Team™ and work with you and your representative to present the business in a way that will command an optimal price. Many Partners are Certified Business Transition Experts™, specially trained to lead the exit process.

I wish you all the best in your exit endeavors.


Jeff Mann 

About the Author 

Jeff Mann is a Fort Wayne, Indiana based Partner with B2BCFO®. He is a senior financial executive with 40 years of experience. He brings “big company” CFO expertise to privately-held businesses and helps business owners to achieve their personal and financial goals. Jeff has been the lead financial executive for several business sales and purchases. He holds a BS in accounting from the University of Virginia and an MBA in finance and marketing from Northwestern University. Jeff expects to earn certification as a Certified Business Transition Expert® Spring 2017.


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