What to Do When the Deal Falls Through
If you’ve been in this business (of helping people sell their business) as long as I have, you’ve had the experience of a “great” deal going sour at the last possible minute. Over the past twenty-five years I’ve certainly seen business sales that I would not, frankly, have given much of a chance. But of course, the reverse happens too now and then, when deals that looked completely solid fall through at the last minute. How do you handle it if that happens to you? Here are some tips from an Exit Planning advisor who has seen it all.
1. Don’t “necessarily” blame yourself. I say “necessarily” because there probably are some things you can learn from the situation to do differently next time – but we’ll get to those in a minute. It’s important, when the sale of your business falls through, not to indulge in too much regret. That won’t help you get where you want to be. Realize that these things happen. And if there was something “off” about the deal, aren’t you glad you found out before it was finalized? Take a deep breath. There’s always another buyer out there.
2. Don’t assume you have to start from “square one.” It’s easy to feel like all your hard work to get the business to the point of sale has been wasted, but that’s just not true. You’ve likely spent months, if not years, preparing your financials, building a solid team of professional advisors to assist with your business sale, and increasing your business value. None of that is wasted just because a buyer pulls out of a deal; dust off your hands and pull out your rolodex – and move on to the next prospect.
3. On the other hand, DO take a realistic look at what soured the deal. Maybe you do need to fix something so that this doesn’t happen again. This is especially important if several deals go south. Don’t be too quick to “blame the economy.” Economic factors may be relevant here, but maybe you overlooked something in the Exit Planning process that you need to go back and reconsider. Are you sure your team of advisors is the right one for your business? Are there any skeletons in your financial closet that you just “happened” to forget to mention? Have you been insisting, against advice, on a higher price for your business than the market for your industry will bear? Now is the time to look at your Exit Plan with clear eyes, so that you don’t spend even more time and energy trying to force an impossible sale.
4. Don’t lick your wounds in private. Though the last thing you may feel like doing is picking up the phone, now is the best time to get out there and re-energize your business contacts before you lose momentum. Go to business mixers, invite other business owners to lunch, attend some industry events. The next person you talk to could be the perfect buyer for your business.
(For more expert information on selling your business, go to ExitPlanPros.)
