Top 3 Reasons No One Wants to Buy Your Business

Imagine this: your friend just had a baby boy and is showing you photos of the red-faced crying infant as they excitedly tell you how cute he is. You try your best to hide your very loud facial expressions and muster up a compliment for the baby. But you know this baby is not cute, and the parents are too close to the situation to see that. We have all been in this type of situation, but no one would actually admit to their friend that their baby is ugly. Everyone thinks their newborn baby is beautiful and similarly every business owner thinks their business is a great success.

As a business owner you have spent the majority of your life working on and in your business. You have cared for your employees and your customers, you know your business inside and out, and you think it should be worth top dollar when you go to sell. We hate to be that friend, but your “baby” may be ugly.

Do You Have Unrealistic Value Expectations?

We see from many lower middle market and small business studies that almost 70% of companies put on the market today do not sell (Source: Exit Planning Institute). Why do you think that is? You may be thinking, “my business would easily sell if I put it on the market today, I would be one of the successful 30% of owners that are able to sell their business for a profit.” Maybe you are right, but if statistics show us anything, you are likely not prepared to sell your business in its current state. Most business owners see the revenue their businesses earn and assume that will translate to high profits during a business sale. However, just because your business makes money, it does not make it valuable to a buyer. In fact, if the only thing you focus your energy on as an owner is revenue, your business is likely not that valuable. Many business owners don’t understand what drives value and therefore have an unrealistic opinion of it.

Do You Get Cold Feet at the Thought of Leaving Your Business?

Many business owners back out of the sale of their business is because they have spent the better part of their life working on their business. They get uneasy about the future and start to regret or question their decision to sell. The business is quite literally their “baby” and the thought of giving their baby to someone else is the cause of great stress and regret. No potential buyer seems good enough to purchase and run your business, so you decide to back out before they get the chance.

Can You Limit Owner Regret?

The majority of business owners report great disappointment after their exits. You have worked too hard for too long to fall into this same trap. Now is the time to educate yourself on the myriad of possibilities in front of you and begin adjusting your approach to daily operations immediately. Successful exit planning does not happen overnight. A CEPA (Certified Exit Planning Advisor) can help you to begin creating a game plan for cashing in on the value tied up in your business. You deserve it.

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