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Why Deals Fall Apart

Sometimes the purchase/sale process falls apart. There are reasons this happens, and, once understood, many potential deal-breakers can either be avoided or handled beforehand.

Other than problems beyond anyone's control, here are some important reasons why deals fall apart:

The Seller Fails To Reveal Problems

When a seller is not up-front about problems with the business, the problems don't just go away. They are bound to turn up later. When the buyer eventually finds out, they are likely to get cold feet and cancel the deal...since nobody likes that kind of unpleasant surprise. We try to have sellers be as open about the minuses of their business as they are about the pluses. JSBS can handle most problems...if we know about them at the start of the selling process.

Either the Buyer and/or the Seller Grow Impatient

During the course of the selling process, it's easy for impatience to set in. Buyers continue to request additional kinds of information, in quantity, and a seller may grow weary of it all. We get both sides to understand that the sale process takes time, and we are there to keep the deal moving along.

The Seller Doesn't Really Want to Sell

In some instances, the seller does not really want to sell the business. The idea sounded good at the outset, but as things come down to the wire, the fire to sell sometimes goes out. Selling a business has many emotional ramifications; a business often represents the seller's life work. We try to get prospective sellers to make a firm decision to sell before going to market with the business. If there are doubts, we feel that they should be resolved, or the seller should make a decision not to proceed with the process. Some sellers enter the marketplace just to test the waters; to see if they could get their "price" should they ever get really serious. We try to head that off right at the beginning so as not to waste everyone's time and money.

The Buyer Doesn't Really Want to Buy or Doesn't Have the Financial Capability

Buyers can enter the purchase process full of excitement and optimism, and then begin to drag their feet as they draw closer to the "altar." The reality of the purchase price sinks in and they lose their nerve, or they realize that they don't have the wherewithal to take the deal to conclusion. We try to eliminate this possibility when we qualify the buyer.

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