Most business owners believe their company will sell when they’re ready to exit. The harsh reality is that only one in five businesses for sale finds a buyer. Understanding the warning signs of an unprofitable sale can save you from years of wasted effort.
You've spent decades building your business. You're ready to retire, cash out, and enjoy the fruits of your labour. You list your company for sale, confident that buyers will recognise its value. Months pass. Then years. No serious offers arrive. Eventually, you pull the listing and face an uncomfortable truth: your business isn't as sellable as you thought.
This scenario plays out for 80% of business owners who attempt to sell. Only 20% of companies listed for sale actually find buyers. For those who do manage to sell, the average exit value is less than half of what the business could potentially be worth with proper preparation.
Several critical factors doom most sales before they even begin. The first warning sign is owner dependency. If your business can't operate without you making daily decisions, answering customer calls, or managing key relationships, buyers will see it as buying a job rather than an investment. They want systems that generate profit without requiring their constant attention.
Financial chaos presents another major red flag. Buyers expect clean, organised financial records that clearly show profit trends, cash flow patterns, and growth potential. If your books are disorganised, if personal and business expenses are mixed, or if you can't easily demonstrate consistent profitability, serious buyers will walk away quickly.
Revenue instability kills deals too. Businesses that rely heavily on one major customer, have unpredictable income streams, or show declining sales patterns struggle to attract buyers willing to pay full value. The lack of recurring revenue makes future cash flow too uncertain for most purchasers.
It takes time to plan and execute an exit strategy. Successful exits require 3-5 years of advance planning. This timeline allows owners to address the fundamental issues that make businesses unsellable. During this period, smart owners focus on building transferable value by creating documented systems, developing management teams that can operate independently, and establishing multiple revenue streams that don't depend on the owner's personal relationships.
The preparation phase also involves cleaning up financial records, implementing proper accounting systems, and ensuring all legal and regulatory compliance issues are resolved. These seemingly mundane tasks often determine whether a sale succeeds or fails.
Strategic business consultants like Paraic Bergin specialise in helping owners avoid these common pitfalls. With three decades of experience in business turnaround and strategic restructuring, consultants can identify potential sale-killers years before they become problems.
Professional exit planning involves comprehensive assessment of business readiness, strategic preparation for maximum valuation, and guidance through the complex process of choosing the right exit strategy. Whether through strategic acquisitions, management buyouts, family succession, or other approaches, expert guidance significantly improves both the likelihood of a successful sale and the final purchase price.
The business owners who achieve profitable exits start planning years before they intend to sell. They recognise that preparation time is the most valuable investment they can make in their exit strategy.
If you're considering an exit within the next five years, now is the time to assess your business's sellability and begin addressing any gaps. The alternative—joining the 80% of failed sales—is too costly to ignore.
