Transferability

Only 20-30% of businesses marketed for sale actually sell according to research done by the Exit Planning Institute (EPI).

The top three reasons for a business not being sold are:

1. Poor Financial Quality – A business must be able to produce timely and accurate financial statements at a moment’s notice. If a buyer cannot assess the business’ ability to generate positive cash flow, the business has limited value.
2. Owner Centricity – If all the trade secrets, relationships and knowledge are concentrated with the exiting owner, the business has limited value.
3. Customer Concentration – If the majority of the revenue and profitability is concentrated amongst a few clients, the loss of one or more of those clients is devastating to the business and thus the business has limited value.