Market Pulse Q1 2019

IBBA Q1 2019-MarketPulse


Will it sell?

Not every business will sell and a significant number never make it to market because professional, ethical advisors won’t take on an engagement with little to no chance of success. The Q1 2019 Market Pulse Survey reveals that, on average, advisors decline about 70% of the business opportunities that come their way because the business is considered “non-saleable.”

“There are any number of reasons we might decline to take a business to market,” said Lisa Riley, principal of LINK Business-Phoenix. “Unrealistic expectations, meaning sellers place too high a value on their business, is typically the number one deal killer. Declining sales trends, dated business practices, over-reliance on the owner, and significant customer concentration issues can all impact your ability to sell.”

“As advisors, it’s our obligation to tell people what they need to hear, not what they want to hear,” said Scott Bushkie, managing partner of Cornerstone Business Services. “The further ahead you plan, the more we can help you overcome certain issues that would be red flags for buyers. But when business owners hang on too long, or come to the table burned out, then we might have to start talking about a distressed business sale or no sale at all.”

Even when advisors do accept a business engagement, nearly half of those engagements will terminate before a successful closing. This finding has been relatively consistent across the survey’s seven-year history. . . .