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Why deals do not close

Steve Sink is the founder and managing partner of Phoenix Affiliates Ltd.

Any number of things can derail a deal to buy or sell a business. Here are a few of them.

Sellers:

·         Do not have a valid reason for selling

·         Just testing the waters.

·         Unrealistic sale price

·         Lack of honesty.

·         Lack of or poor records.

·         Do not understand the tax consequences or legal issues.

·         Will not provide seller financing

 

Buyers:

·         The fear of ownership is greater than the urge for ownership

·         Do not understand the buying process

·         Are not willing to do the work required of an owner

·         Influence of factors opposed to the purchase of a business

·         Lack of capital

·         No relative management expertise

·         Lack of experienced advisors

 

Other:

·         Due diligence discovery problems

·         Bank or SBA requirement for seller financing

·         Advisors with little or no experience in transactions

·         Seller cannot provide the required documents

·         Government regulations

·         Overly aggressive advice by advisors resulting in roadblocks

 

Steve Sink

ss@phxaffiliates.com

Certified Business Intermediary

Merger and Acquisition Master Intermediary

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