Why Deals Fall Apart
A successful transaction usually requires overcoming a number of obstacles. Many of these are minor and can easily be resolved. If the parties want the deal to work, talking it through can solve almost any routine problem that arises. Outside advisors can be a real advantage in these negotiations. However, there are more serious issues that can be fatal to the closing of the deal, such as some of the following:
The seller may be unwilling to agree to some of the conditions presented by the buyer. Many times, the conditions provide too many loose ends for the seller, or they weren't part of the original agreement. No one is willing to bend, there appears to be no solution, and the deal craters.
Due diligence uncovers problem areas such as environmental concerns or additional liabilities. Another potential problem area is that of competitive information. The buyer wants a list of customers and would like to contact them. The seller doesn't want this done and an impasse results.
During the negotiations, the buyer, or the seller, discovers that there is a lack of chemistry. This can complicate the two agreeing on any other problem that develops.
Some of the information presented is not accurate or is incomplete. The financials may contain too many deviations from the figures presented by the seller. There are also times when the seller's records have not been maintained properly or the tax returns don't support the financial statements.
There is a breach of confidentiality or there is a loss of credibility by either party, or, by both. Either one of these is usually a deal breaker.
The buyer may ultimately decide that the deal is too big a risk, or an outside advisor, or even a friend, suggests that the business is not a good one.
There are also times when a seller decides mid-way through the deal that he or she really doesn't want to sell. The seller pulls out of the deal or stops cooperating and the deal falls apart.
The sale of any business involves major change on both the buy and sell sides. This may threaten some of the participants or their advisors - and even family members. It is important that all parties directly involved in the selling and buying process be in agreement. No one wants a participant or internal mischief threatening the sale. Unfortunately, after it looks as if everything is under control, one side or the other may suddenly come up with some last-minute demands. When this happens, these last-minute demands may cause the deal to fall apart. All of these potential deal breakers make it even more critical that a professional business intermediary be involved in every step of the transaction. They have been through many of the events outlined above and their experience and knowledge may help to avoid or resolve these issues.
Do you know why deals fall apart? Read on to learn some of the reasons and discover what buyer and sellers can do to increase the chance of a successful closing. We help business owners plan, prepare for, and execute successful business transactions. We specialize in IT and other technical service companies. Thanks for following us - the highest compliment we can receive is a referral from you. 
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