6 Reasons Your Business Won’t Sell For The Price You’d Like
Axial puts together six impediments to getting full worth for your business when putting it up for sale.
The big one, of course, is the business’s dependence on you. To the extent that the business is reliant on you, you are the main asset … and no buyer wants to pay good money for a business where the main asset is going to walk out of the door on day one.
Not having a plan for growth and not having sufficient working capital are other reasons they offer. Not having a recurring revenue stream is another turn off. As is the lack of a “moat” or a high barrier to entry. If it is easy to set up in competition with you, then your business lacks a “moat”.
There are many reasons a business might achieve less than its desired price upon sale, the most fundamental of which is that a buyer does not assign the business the same value as the seller.
Here are some common company characteristics that cause buyers to downgrade value — and ways to address them in advance of a sale.