Why Deals Don’t Close

Photo Credit: faungg via Compfight cc

Photo Credit: faungg via Compfight cc


· Sellers don’t have a specific reason for selling.

· Sellers are testing the waters to check the marketplace and the price. (They are similar to the buyer who is “just shopping.”)

· Sellers are completely unrealistic about the price and don’t understand the marketplace for their business.

· Sellers are not honest about their business or their situation. The reason they want to sell is that the business is not viable, revenues are declining, possible environmental problems, new competition is entering the marketplace or some other serious issues that the seller has not revealed.

· Sellers don’t disclose that there are more than one owner and they are not all in agreement.

· Sellers have not checked with their outside advisors about possible financial, tax or legal implications of selling their business until an offer is presented.

· Sellers are unprepared or misinformed about providing seller financing to complete a transaction. This is key since according to a recent WSJ survey, up to 90% of closed transaction involved some form of seller finance.


· Buyers don’t have a valid reason to buy a business, or the reason is not strong enough to overcome the fear of purchasing a business.

· Buyers have unrealistic expectations regarding the value/price, appropriate terms, the buying process, and how family-owned businesses operate.

· Buyers aren’t willing (some of them) to do the work necessary to own and operate their own business.

· Buyers are influenced by a spouse (or someone else) who is opposed to the purchase of a business when that person is not informed on what is being purchased.

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Matt Coletta, CBB, CBI, is a Certified Business Broker and a Certified Business Intermediary with over 25 years of experience in successfully representing Business Sellers and Buyers in various industries. Matt is a Los Angeles Business Broker and represents Business Owners and Businesses for Sale throughout Southern California including: Los Angeles County, Orange County, Ventura County, West Los Angeles, City of Industry, Downtown Los Angele, Gardena, Whittier, San Gabriel, Upland, South Bay, Torrance, Newport Beach, Irvine, Brea, Anaheim, Long Beach, San Fernando Valley, Woodland Hills, Chatsworth, Sherman Oaks, North Hollywood, Northridge, Van Nuys, Burbank, Glendale, Pasadena, Sun Valley, Valencia, Santa Clarita, Palmdale, Ventura, Camarillo, Oxnard, Thousand Oaks, Simi Valley and other cities in the greater Southern California area.