Putting your business up for sale can be a long and emotional process. So, it feels like finding the right buyer should be the end of the road. But any experienced broker can tell you that a deal can fall apart even when you have the right buyer and the right price. Here are some things an owner should be aware of that can hurt a deal.
Having books that aren’t organized and numbers that can’t be proven.

Your broker will push you to ensure your records are accurate, organized, and easy for a buyer to understand. You’ll be asked to produce lots of records during due diligence, so it makes sense to have duplicates ready. Your effort upfront will pay off when you don’t have to disrupt your busy workday chasing documents.
All your numbers should be accurate and provable, but I’ll say it anyway. Make sure your personal expenses and add-backs are taken care of, and that your books match tax filings. Reconciling your Profit and Loss Statements and Balance Sheets with the tax records is a good investment of your time and will save you headaches later when lenders get involved asking for information.

Taking your foot off the gas.

Many owners start to relax when they’ve found a buyer and a deal feels imminent. But it can take months to close the sale, and if you lose focus on your business, your company’s value can decline rapidly. There’s no doubt that it’s a challenge to run a company while you’re trying to negotiate a deal, but it’s essential to do so. Over the weeks or months of diligence and negotiation, your company’s value should remain as close as possible to its value when it was listed. Any significant change can result in a buyer changing their offer or a lender refusing to fund the full asking price.

Changes in staffing or your customer base.

It’s possible (but hopefully, not likely) that your staff could find out about the sale before it’s ready to close. Some may decide to leave, which could be material to your ability to keep operations running smoothly and profitability steady. It’s especially hazardous if you have a key employee leave; that could affect the offer and even kill a deal.

Of course, employees leave for various reasons, so retaining talent is another good reason to stay focused and active in the company. The loss of a big customer or non-renewal of a contract could also affect your company’s value in the eyes of a buyer or lender. The stability of your income streams and the customer base is one of the largest risk factors for a buyer, so it’s something both you and they should pay close attention to.
Personality conflicts between the buyer and seller.

Finally, it comes down to people. The diligence period is your opportunity to build trust and goodwill, so it benefits you to be on your best and most accommodating behavior. Even after an initial Letter of Intent is offered, there are plenty of items to be negotiated.

I’ve written about this before. My definition of a great deal is when the buyer walks away thinking, “I might have paid a little more than I wanted, but I got a good deal.” The seller walks away thinking, “I might have hoped for a little more, but I’m confident I got a good deal.” And everyone thinks the broker earned his cut.
There’s always a possibility that you and the buyer will have differences in style, opinion, or definitions of what’s fair. That happens. But if you can handle your side of any discussion with patience, grace, and good faith, you’ll be able to make it through to the closing with the best possible offer in hand. No one wins a deal unless both parties feel like they have.

If I can help you decide if you’re ready to sell your business, I would be happy to have a conversation with you.