Deal risk

The deal killers to fix before you go to market

By Rick Rohac, Business Broker and M&A Advisor

Most deals don't fall apart over price. They fall apart in due diligence, when the buyer finds something they didn't expect and stops trusting the rest of the story. The good news is that almost every one of these problems can be found and dealt with before a buyer ever sees your business.

1. One customer is too big

If a single customer brings in a large share of your revenue, a buyer sees a business that could lose a big piece of itself with one phone call. You don't have to fire anyone, but you should know your numbers, have that relationship on paper where you can, and show a plan to grow the rest of the book.

2. The business is you

When every key relationship, every price quote and every hard decision runs through the owner, the buyer is worried about what happens the day you leave. Start handing off now. A capable second-in-command and written processes are worth real money at the closing table.

3. The books don't tell a clear story

Personal expenses mixed in, numbers that don't match the tax returns, or financials that take an hour to explain. Clean them up, and get two or three years of statements that a stranger can follow on their own.

4. Loose ends nobody wrote down

A lease that's about to run out, a handshake deal with a key supplier, equipment that isn't really owned, a pending dispute. Any of these can stop a deal late in the process, when everyone is tired and patience is thin. Make a list and work through it.

5. An owner who isn't ready

This one surprises people. Some owners start the process, then can't sign when the time comes, because they haven't decided what comes next for them. Be honest with yourself about your timing and your plans before you go to market, not after.

None of this has to be fixed overnight. But the earlier you start, the more of it becomes a strength instead of a discount.