15 Reasons Businesses Initially Don't Sell

Following are the 15 most common reasons businesses initially don't sell:


  1. The asking price is too high given the market;
  2. The books and records are in poor condition making it difficult for a buyer to accurately determine the value and cash flow of the business;
  3. The premises lease is short and cannot be renegotiated on acceptable terms;
  4. The specific industry is in decline;
  5. The revenue of the business has been declining;
  6. The seller is unwilling to stay after the sale in order to facilitate a smooth transition;
  7. The location of the business is not conducive to growth of the business;
  8. The seller wants the business to be valued based upon income that has not been reported on state and federal tax returns;
  9. An earn-out provision is appropriate, but the seller will not consider it;
  10. The seller is unwilling to provide partial financing;
  11. The cash flow is based upon sustainably low employee compensation and/or rent;
  12. Only a few clients or customers make up a significant percentage of the revenue of the business, resulting in a high risk to the buyer;
  13. The owner is the business, meaning the business is highly dependent on the owner's unique knowledge and his or her relationships with key clients/customers;
  14. The business has several family members in key positions so that if one or more left the company, it would suffer financially; and
  15. The seller has not established written policies and procedures that would be helpful to any buyer and future employees.


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