Disruptive Factors in Selling Your Business
At some point, every business owner will need to consider selling his or her business. This means you’ll need to be ready to overcome various obstacles, as selling a business can be confusing and time-consuming. This is especially true for those who have not gone through the process. Let’s focus on some critical reasons why deals can fall apart.
Buyers, like sellers, enter the process with preconceived notions about how the process should work and what they consider “a great deal.” The psychological factors involved in selling a business shouldn’t be overlooked.
Sellers need to understand the specific wants and desires of the buyer as well as their psychology.
Even serious buyers may have unrealistic expectations regarding various aspects of a business, ranging from its price to opportunities for future growth. In some cases, they may stall because they are not quite ready to buy a business and see no urgency in the matter.
Buyers can also be influenced by outside parties, whether advisors or friends and family. In short, sellers may discover that, for all practical purposes, buyers may be several people forming a collective opinion on issues regarding the business.
A seller’s psychology can play a huge role in whether or not a business is successfully sold. Many sellers enter the process without fully understanding what is involved. This factor, of course, underscores the tremendous importance of working with professionals for months, if not years, before you place your business on the market. These professionals should include an M&A Advisor or Business Broker.
Another major obstacle is that many sellers have unrealistic expectations about both price and the time frame their business can be sold. Sellers should enter the selling process with their eyes open and realistic expectations. Be sure to establish a fair price. It’s also important to understand that finding a buyer may take a year or longer.
Acts of Fate
Sellers should remember that many “acts of fate” can disrupt a deal. A deal may seem like everything is moving along without problems, only to discover at the last minute that the buyer cannot secure the needed funds as expected.
The complexity of selling a business is one of the main reasons why so many business owners opt to work with a brokerage professional. It is crucial for all parties involved to realize that until a deal is finalized, problems can still arise. They can appear from unexpected directions. But it is difficult to anticipate and spot every potential disruption.