According to the Harvard Business Review, an estimated 70% to 90% of acquisition attempts fail.
That’s a sobering statistic, especially for business owners thinking about selling in the near future.
While deals fall apart for a variety of reasons, this week’s newsletter focuses on:
- 3 common mistakes that kill deals
- 2 frameworks that give sellers more control
- 1 action item you can implement today to improve your odds of success
3 Common Mistakes That Kill Deals
1. Lack of preparation
Many deals fall apart because sellers aren’t ready for the scrutiny that comes with due diligence. Missing financials, unaddressed risk areas, and key-person dependency — these all become red flags for serious buyers.
2. Cultural misalignment
Even if the numbers check out, misaligned values and leadership styles between buyer and seller can tank a deal. We’ve seen buyers walk away simply because the “fit” didn’t feel right.
3. Unrealistic expectations
Some owners enter the process with a number in their head that’s disconnected from market reality. When those expectations clash with the market, negotiations tend to stall or fall apart.
2 Frameworks For Success
Reverse Due Diligence
In this framework, you’re putting yourself in the buyer’s shoes. Have your advisor, CPA, or someone on your team run a light internal diligence process. Pay particular attention to red flags, points of confusion, and other areas buyers might push back on. Fixing these in advance helps the real process go more smoothly.
“Legacy Lens” Thinking
One of author Stephen Covey’s “7 Habits of Highly Effective People” is to “begin with the end in mind.” Before getting into the weeds of the due diligence process, consider what a successful transition means to you. This goes beyond price — think about your employees, brand reputation, customers, or community. View the potential sale with a “legacy lens” so you can better assess whether a buyer’s intentions align with that vision.
List Of Our Completed Transactions
1 Action Item This Week
Schedule a “Deal Readiness Review” with your leadership team
Go into the meeting ready to answer the question: If we entered due diligence tomorrow, what documentation would we need?