In recent online chatter, I've seen a recurring sentiment: the idea that only 20% of businesses up for sale actually complete the transaction. While this figure might be alarming at first glance, it's crucial to scratch below the surface and understand the intricacies of the SME business sale market.
Having had the privilege of overseeing the successful completion of over 100 SME business deals, I believe it's paramount to bring a perspective that takes into account not just the black and white figures, but the shades of grey that determine the outcomes of a successful business sale and the supporting confidential marketing process.
1. Time on the Market Matters
Businesses often require strategic positioning, networking, and the right alignment of buyers and sellers. So, to state outright that 80% of businesses don't sell without considering the time they've been on the market can be misleading.
If we reframe the question to ask, "How many businesses sell within the first six months of going to market?" we get a different answer. While some businesses might quickly find a buyer, others could require a more extended period of positioning and negotiation. To many, it does not matter if the sale takes 6 months or 3 years if they start early enough.
2. Gauging Market Appetite
A foray into the business sale market doesn't always come with the absolute intention of selling. Many astute business owners test the waters to get a sense of the current demand and valuation for their business. In such instances, the sale might only go through if the conditions are just right. Otherwise, the owner may decide to pull back, refine the business further, and reconsider selling at a later stage. Thus, labelling a business that doesn't sell as a failure overlooks the strategic considerations behind a confidential ‘toe in the water’ test.
3. The Multifaceted Reasons for Selling
Every business sale comes with its unique set of motivations. Some sellers might look for a quick exit, while others might be scouting for the perfect successor to take their legacy forward. The lack of a quick sale doesn't necessarily translate to a lack of interest or value in the business. Sometimes, it's about waiting for the right match.
4. Preparation, Patience, and Realistic Expectations
The trajectory of a business sale largely hinges on the owners’ preparation. Those who've taken the time to prepare their business for the market, shown patience during the marketing process, with realistic deal expectations are usually better positioned for success.
So, if you are thinking of selling, don’t panic, talk to an expert early. Yes, some businesses don't sell, but with the right preparation, patience, and guidance from experienced advisers, You can navigate the complexities of the sale process effectively.
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