Why Most Deals Don’t Close

Why Most Deals Don’t Close and What You Can Do About It

The often-cited industry statistic is that only 25% to 30% of businesses sell to new ownership.  But working with an accredited advisor doubles the odds of success.  Participants in the Market Pulse survey reports closing ratios of about 50%. 

This success can be explained by experienced by brokers shunning listings that are not viable, through broker education of sellers to help them avoid the most common selling pitfalls, and – of course – the deal-making and financing expertise that comes with the experience of a seasoned broker.

The main reasons that deals don’t close vary by deal size:

  • Poor financials are the leading cause for deals < $500K
  • Lack of financing leads in deals between $500K and $2 million
  • Unrealistic seller expectations are the main reason for deals between $2M and $50M

Of course, there are endless other reasons that deals don’t close, for example, market changes before closing, failure to meet projections, poor preparation for due diligence, and moving too slowly – time kills deals.   But significantly more deals close when an accredited advisor is on board!