How many businesses that are put up for sale actually sell? If you are considering becoming a business broker, that might be a useful bit of information to have, don’t you think?
For example, there is a convenience store/gas station near one of our offices that is listed for sale with a real estate agent. Because we’ve marketed and sold a number of similar businesses over the years and, as a result, have a large list of potential buyers for such opportunities, I called the agent to get the details.
It was no surprise to learn that the agent didn’t have any.
I then asked how the price was arrived at. “The seller”, with the agent’s assistance, “…pulled it out of his ear.” I kid you not. And the agent listed the business anyway! That business has been “on the market” for more than two years.
If you’ve been reading this blog for any period of time, you’ve read many examples of how businesses listed with realtors never sell. That explains some significant proportion of the high percentages of “never solds”.
There is a ton of reasons businesses don’t sell. As I mention in the video that opens this post, I’m at the annual International Business Brokers Association conference in Orlando, Florida. Yesterday, I was part of a group of about 30 brokers that listed some of the reasons businesses don’t sell. Here’s a list of of some of them:
| • Price is too high (the BIG one!) | • Books are a mess |
| • Geography (too remote or dangerous) | • Business obsolescence |
| • Environmental and legal issues | • Unethical sellers (they’re out there!) |
| • Poor broker representation | • Seller remorse (no plan for what’s next) |
| • Seller changes price/terms | • Customer concentration |
| • Represented by a realtor (DUH!) | • Financing |
| • Attorneys (notorious for screwing up deals) | • Inexperienced advisors (the wrong attorney) |