Pricing your business and selecting a Business Broker are the two most important things an owner will have to do in preparing to sell their business in Florida.
This comprehensive study why sellers hire brokers was conducted by Ted J. Leverette with Partner On-Call LLC. Ted is not a business broker, but is a consultant to owners looking to sell their business.
- Business Owner’s Failure to Plan for a Sale
- Inadequate Seller’s Discretionary Earnings (SDE)
- Low or Inconsistent Gross Margins
- Inadequate Marketing and Sales Efforts
- Owners With Unrealistic Price Expectations
- Business Acquisitions that Cannot be Financed
- Owners Unwilling to Provide Partial Financing
- Owners Who Cannot Afford to Sell
- C-Corporation Tax Implications
- Inadequate Recordkeeping / Accounting Systems / Financial Reports
- Inadequate Second-Level Management
- Customer Concentration Issues
- Asset Value too High vs. Return on Investment
- Real Estate Value too High vs. Return on Investment
- Large Working Capital Requirements
- Excessive Personal Expenses and Skimming Cash
- Burned-Out Owner Ruins Business Value
- Owners Who Try to Sell the Business Themselves
- Owners Who are not Committed to a Sale
- Choosing The Wrong Intermediary
- Trust Issues from Inadequate Disclosures before Due Diligence
- Inadequate Preparation for Due Diligence
- Losing Focus – Business Decline during Sale Process
- Lack of Flexibility in Negotiations
- Sellers’ Lack of Emotional Control
- Sellers Don’t Understand Buyers’ Motivations
- Owners Don’t Sell Business’ Growth Potential
- Difficulties Transferring the Facility Lease
- Real Estate Transfer Issues
- Bad Timing – Waiting too Long to Sell
- Confidentiality Breach and Employee Suspicion
- Lack of Required Approvals from Stakeholders
- Unproductive Assets
- Owners Forced to Sell Due to Factors Beyond their Control
- Trying to Sell to Someone Who Doesn’t Want to Buy (Competitors)
- Seller Fails to Plan for Life after the Sale
- Sellers without a Business Plan
- Sellers Unwilling to Use Professional Advisors
- Not Involving Professional Advisors Soon Enough
- Overprotective Professional Advisors
- Professional Advisors’ Potential Conflict of Interest
- Intentional Misrepresentation by Seller
- Sellers’ Impatience with Sale Process
- Inflexibility in Structuring a Deal
- Not Believing Time is of the Essence
- Failure to Facilitate Closing on a Timely Basis
- Sellers Surprised by Tax Implications
- Failures in Negotiating Representation and Warranties
- Failures in Negotiating Non-compete Agreements
- Failures in Negotiating Terms of Seller Financing
- Nit-picking in Negotiations
- Technological Obsolescence
- Lack of Compliance with Regulations (Environmental, Health/Safety, Taxes, etc.)
- Lack of Compliance with Regulatory Authorities (Franchisors, Licensors, etc.)
- Unresolved Legal Issues
- Environmental Risks
- Employee/Labor Problems
- Pension Plans and other Post-Employment Issues
- Changes in Competitive Threats or Business Environment
- Lack of Chemistry between Buyer and Seller
- Lack of Barriers to Entry
- Problematic Vendor Relationships
- Accounts Receivable Collections Issues
- Undisclosed Liabilities and Debts
- Poor Location
- Sellers’ Unwillingness to Stay for a Transition Period
Compiled by Jim Stauder – owner and author of Howtoplanandsellabusiness.com.
