Steve Sink wrote recently wrote a blog post on IowaBiz covering Why Deals do not Close. I recommend buyers and sellers of businesses to read the post. Fortunately, most of the deals I work on tend to close but from time to time there are issues with a deal or perhaps even litigation after a deal closes.
One of the biggest reasons I’ve seen that hampers a deal is when a buyer or seller has an unrealistic view of the sales price. This is particularly true for a seller. While I understand the notion that you want the best price possible, a seller should understand that it is important to have the transaction be a win/win. A Seller should want the buyer to be successful (particularly if seller financing is involved). Unfortunately there are lots of times that the seller, or maybe the Seller’s advisors, don’t understand this concept. Even if your deal closes, you may run into litigation issues if the business is priced too high which will eat into the proceeds of the sales price.
Want your deal to close without litigation on the back end? Don’t be greedy. Be sure to read the rest of Steve’s list.