Why Isn't My Business Selling?
When a business has been on the market without selling, the first reaction is often to lower the asking price.
Sometimes that's the right answer.
But I've learned that a lower price doesn't fix every reason a buyer says no.
When I'm representing a business and buyers are showing interest but not moving forward, I want to understand what's stopping them before recommending a price change.
Listen to What Buyers Are Telling You
If one buyer doesn't like the lease, that may simply be that buyer.
If several qualified buyers raise the same concern, I'm paying attention.
The same applies to customer concentration, owner dependence, financials, add-backs, financing, or other issues that make a buyer uncomfortable.
Buyer feedback is valuable because it tells you how the market is actually viewing the business.
That doesn't mean every buyer objection is valid or that a seller should make changes every time someone raises a concern.
But patterns matter.
A Lower Price Doesn't Fix Every Problem
Price is certainly important. If a business is materially overpriced, buyers may never engage in the first place.
But once qualified buyers are looking at the opportunity, other factors become just as important.
If the lease is too short, lowering the price doesn't extend it.
If the business depends heavily on the owner, lowering the price doesn't make the transition easier.
If the financials are difficult to understand or the add-backs aren't properly documented, a price reduction doesn't make those numbers more credible.
And if the business can't support the debt needed to finance the acquisition, a lower price may help, but it doesn't necessarily solve the problem.
The underlying issue still matters.
This Is Why I Believe in Preparing Before Going to Market
I would rather spend more time preparing a business before listing it than discover major issues after buyers become involved.
Before I take a business to market, I want to understand the financials, identify and document the add-backs, review potential risks, and ask many of the same questions I expect buyers to ask.
That doesn't mean there won't be objections.
Every business has strengths and weaknesses, and every buyer evaluates risk differently.
The goal is to understand those issues in advance and be prepared to address them.
Understand Why Before Changing the Price
If a business isn't selling, price absolutely needs to be considered.
But it shouldn't automatically be the answer.
Look at the activity. Look at the quality of the buyers. Look at where buyers are dropping out of the process. Most importantly, listen for patterns in what they're telling you.
Sometimes the market is telling you the price is too high.
Other times, it's telling you something else.
Before changing the price, understand why buyers are saying no.