Why won't your Business Sell? - Business Brokers | 1-800-Biz-Broker

Unfortunately, not every business is sellable (is that a word?). I have been a business broker since 2006 (wow, time flies!) and as much as I try to help every business owner that is looking to sell their business, I have learned that not every business will sell. This is due to a variety of reasons: poor books, bad lease/landlord, dying industry, no business (sometime all they have is FF&E), etc. Here is a secret, I try my best NOT to list these type of businesses. I am polite, honest, and very empathetic about the situation, but I just don’t have the time, resources, or commitment it takes to represent every business owner.

Despite my screening process to represent the businesses I feel I can add value to, I still only close about 65% of the businesses I list. (industry average is only 50%) So what is going on here?

I want to give credit to the Pepperdine/IBBA Market Pulse Report for the chart below, Why won’t your business sell:

The #1 reason a business won’t sell, “Unrealistic Value Expectations by the Seller”

The business owner thinks their business is worth MUCH more than is realistic. I believe this is mostly our industry’s fault. We, as a whole, are not educating our clients with respect to how business valuations are calculated. Compound this with eager business brokers to amass listings at all costs; including accepting a business owners lofty price, and we, as business brokers, set ourselves up to fail the business owner.

Bottom line, if you want to sell your business…. do some research. Learn how to value a business in your industry. Check sites like BizBuySell and see what a business of similar size is listed for. And, above all, consult a business broker with a history of success and experience.