There is a fairly structured process we have developed to sell a business, and there are all the normal thoughts and concerns that a seller goes through in terms of a sale: lifestyle issues, risk tolerance, ego issues, health problems, etc. These can often throw a bump or curve in the process. When you add a son, sister, mom or dad into the equation, there can big surprises.
I once had a deal I thought was all but done – and I’m pretty conservative at when to say a deal will likely happen. But this one had gone through due diligence and there didn’t seem to be much that could come up to kill it. The buyer had the money and was looking forward to the close. But this was a family run business, and at the last minute one of the owners decided that selling would change the relationship with her son, and she didn’t want to go through with it. I have people tell me it isn’t about the money, but often I can tell they are just mouthing the words, and it is all about the money for them. But for her, it really wasn’t about the money.
Another time we had a deal going, but the seller realized he had an agreement with his niece where if he sold it before a certain date, the niece would get a certain percentage, in this case I think it was $50K or so. The seller didn’t want that to happen, to put it mildly, and he decided to sit on the deal until that date passed. But this was a few years ago just when things started heading downhill for those related to the housing market, as his company was. His sales started to decline, and we were going nuts. We could see what was happening, but the seller wouldn’t budge. We honestly thought the deal would never happen, but it actually did get done. However the buyer did re-negotiate the price. It cost the seller $1 million to wait so his niece didn’t get 50 thousand.
Marriages falling apart have led to many a business sale. However I once was surprised that at the last minute in a deal, the husband called and said his wife was divorcing him so they were keeping the company and calling off the deal. Basically there were selling so they could spend more time together, and now that didn’t seem like such a good idea. I had been working with them both for many months and had no idea, although no big surprise there. So the deal was called off for a few weeks, but then they called and it was back on (both their relationship and the deal) and the deal closed shortly thereafter. In fact the buyer rushed it along as fast as he could before they got mad at each other again.
I guess in deals as in life, when it is the matters of the heart, and family, you really don’t know what is going to happen.