To sell, a business owner needs succession-transition plan

If you are a business owner, this statistic should get your attention: Nationally, less than 20 percent of businesses that go to market will sell.

If you are a business owner, this statistic should get your attention: Nationally, less than 20 percent of businesses that go to market will sell.

Business sales are an incredibly emotional and inefficient marketplace with numerous variables that cause deal failure.

There are thousands of businesses for sale in today’s marketplace. Just check out some of the business for-sale websites such as BizBuySell, BizQuest or others and see the thousands advertised for sale.

According to BizBuySell, in addition to businesses that don’t sell, only 10 percent of all would-be buyers actually buy.

Why is this? It doesn’t make any sense.

There are so many buyers looking for investments and many more looking to replace income from a job. Why is it that the odds of selling and buying are so low?

It turns out the sale of a business is a very precarious process. Here are three of the most common reasons why the process breaks down.

(1) The business is distressed, not profitable or revenues have substantially declined.

In today’s market, the majority of business buyers are looking for a business that will provide an income. An unprofitable business or a business that appears to be financially distressed is simply not a good investment and won’t provide the necessary income for the buyer.

Many of the businesses in this category do not sell. In many cases, the owners of these businesses run out of money and simply close.

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