Reasons Why Business Sales Derail, Part 2

In part one of this two-part blog series, we went over the two primary culprits in business sales that fall apart: The sellers and buyers involved. It stands to reason that the two entities most directly involved in this process would be the ones with the most power to torpedo it if they made certain mistakes.

At Utah Business Consultants, though, we’re here to tell you that getting a deal done may contain small roadblocks that aren’t caused by either the buyer or seller. These aren’t as common or likely, and can mostly be avoided through employing pros like ours who know how to approach each important area, but they’re worth knowing about in case you experience any of them while trying to sell your business. Let’s take a look at some non-buyer-or-seller reasons why business sales may derail.

“Acts of Fate”

In some cases, things just happen that affect the quality of a deal and may even lead to it falling through. Luckily though, these are usually preventable if you take the right advanced steps. A few instances here include:

• Buyer or third-party investigations of the finances and other areas of the business to be sold reveal certain issues, such as environmental problems or financial issues. This one rides a fine line between being an act of fate and something the seller can control – but mistakes are made, to be sure, and it’s possible this was an honest one.
• In other situations, issues may arise with local, state or federal government agencies related to the sale. In most of these cases, neither the buyer or seller will have any role in this.
• The seller also might not be able to fully prove or substantiate their earnings, or the buyer might simply have a different opinion of what these numbers mean.

Third Party Problems

The buyer and seller aren’t always the only entities who have some impact over the sale of a business. There might be various advisors or third parties involved, including attorneys in many cases. A couple possible issues that can arise here:

• Buyers or sellers might receive highly aggressive advice from their attorneys or other advisors, complicating the sale process. These entities can sometimes lead to contentious negotiations that derail the entire sale. If you’re bringing in outside representation (besides our advisors), be sure to vet them in advance and make sure you’re all on the same page.
• If property is being transferred as part of the sale, landlords independent of the buyer or seller may drag their heels somewhat about transferring the lease. They may also have issues with creating a new lease if this is necessary.

For more on avoiding your business sale falling through, or to learn about any of our exit planning or business brokerage services, speak to the pros at Utah Business Consultants today.