Selling a business is often imagined as a smooth handoff—a reward for years of hard work and the beginning of a new chapter. But in reality, even promising deals can unravel, often in ways that surprise even seasoned professionals. The process is rarely straightforward, and seemingly minor issues can trigger major disruptions.
The Illusion of Agreement
At first glance, most deals begin on a hopeful note. Buyers and sellers align on a purchase price and sketch out key terms. But these initial agreements are only the tip of the iceberg. As negotiations progress, the finer points—things like indemnification clauses, working capital targets, or seller transition periods—can quickly become points of contention.
For example, a seller may be startled by the depth of buyer due diligence, or uncomfortable with clauses related to representations and warranties. Meanwhile, buyers might feel that a seller is withholding information or being inflexible on critical deal terms.
People Problems: Emotions and Egos
Many transactions don’t fall apart because of the business itself, but because of the people involved. Sellers often have an emotional attachment to the business, especially in family-owned or long-held enterprises. As closing approaches, “seller’s remorse” can set in, leading to delays, re-negotiations, or even cold feet.
On the buyer’s side, it’s not uncommon to encounter hesitation after an initial burst of enthusiasm. Some buyers lack clarity on their motivations for acquiring a business and may back out when the emotional or financial commitment becomes real.
Even advisers can throw a deal off track. Overly aggressive attorneys or uncooperative CPAs can stall progress or erode trust between parties. When communication breaks down or egos get involved, the deal can stall—or collapse.
Buyers Who Aren’t Ready
Another frequent issue is buyer unpreparedness. Many buyers enter the market without a clear acquisition strategy or firm understanding of what makes a business a good fit for them. After a few months of searching, they may give up out of frustration, or worse, tie up a seller in a lengthy back-and-forth with no real intention—or ability—to close.
Financing also plays a critical role. Even if a buyer is enthusiastic and sincere, a lack of financing or failure to secure an SBA loan can end a deal before it ever truly begins.
Sellers Who Sabotage Their Own Deals
Sellers can also be their own worst enemy. Unrealistic price expectations—often based on emotional value rather than market realities—can instantly repel serious buyers. Likewise, demanding rigid terms (like all-cash deals or short closing timelines) can make the business unfinanceable or impractical for most buyers.
And then there’s the issue of performance. Sellers who shift their attention away from running the business during the sales process often see declining revenue or customer attrition—red flags that cause buyers to walk.
Preventing Deal Failure
The good news? Many of these issues are avoidable. With proper planning, realistic expectations, and a team of deal-savvy professionals, most obstacles can be anticipated and addressed early. That includes:
- Pre-sale preparation (financial cleanup, SBA loan pre-approval)
- Transparent communication throughout the process
- Balanced negotiation of price and terms
- Emotional readiness to move on
Sometimes, despite everyone’s best efforts, the deal just doesn’t come together. And that’s okay. If it becomes clear that the deal is unlikely to succeed, it’s often smarter to walk away than to force an agreement that’s destined to unravel later.