There are many reasons, but here are a few dominant ones.
1) Overvaluation. Many sellers want to “test the waters” and overprice the business. Today’s buyer is educated and usually business-savvy. There is so much pricing data available. Buyers know when a business is overpriced.
2) Sellers are not willing to finance a portion of the sale price. If the business does not qualify for SBA lending, most buyers are not willing or are unable to pay 100% cash to make the acquisition. In many cases the seller will be called upon to assist in the financing. Studies have shown that sellers who are willing to finance a portion of the purchase price will receive a higher price.
3) Declining business revenues
4) Sellers are not willing to negotiate
5) Inaccurate financial records that don’t pass buyer’s due diligence.
6) Sellers get cold feet and withdraw from the market.
7) Sellers, too often, listen to well-meaning outside relatives, friends or advisors who really don’t have sufficient knowledge of the selling process. Sellers who don’t use a professional business broker/intermediary are at a disadvantage. These outside professionals know the marketplace and greatly assist in finding the right buyer. They are a “value-added” service and will more than justify their fee. The seller who represents himself or herself will almost never get the price that a business broker professional will obtain.
8) Landlord issues – After a buyer and seller have “negotiated” a deal is that the landlord cannot come to terms with the seller and/or buyer.
9) Financing is not available
