What are the five things that kill a business sale?
By Andrew Isaacs, CIMA Member in Practice ·
Most business sales fall through on what a buyer finds, not on price. Five things do most of the damage, and every one of them is fixable years ahead. AI Finance Partners works with owners to put them right, and because each one is also a sign of a well run business, the work pays off whether or not you ever sell.
Why do business sales fall through?
A business sale rarely falls over on price. It falls over on what a buyer finds when they start looking properly. A price gets agreed, the buyer digs in, and up come the things nobody tidied: numbers that do not quite add up, profit that hangs on one person, cash trapped in work that was done but never billed. The price drops, or the whole thing quietly falls apart, and either way it is the owner who loses out.
The maddening part is that almost none of it is about the quality of the work you do. It is about whether the business can show, quickly and clearly, how it makes its money, and whether that will survive you walking away. That is a money question, and it is one you can answer years ahead if anyone thinks to ask it early. The five that do the damage are consistent: numbers a buyer cannot trust, profit that leans on one person or one customer, cash tied up in unbilled work, gaps in compliance or admin, and nobody lined up to take over.
Getting ready is not about tomorrow. It is about owning something real today.
Why is getting ready just good management?
Every one of those five is also a sign of a business that is simply well run. Late numbers cost you decisions on an ordinary Tuesday, not just on the day of a sale. Leaning on one person is a risk every week of the year. Cash trapped in unbilled work is your own money sitting idle. Fixing them is not sale prep, it is just running the place well, and the higher price is a bonus that falls out of it.
That is why AI Finance Partners does not treat getting ready to sell as something you panic buy in the year you want out. It is the ordinary result of books kept up to date, a clear view of the cash ahead, and numbers you can actually read. Do that for a few years and the business becomes sellable without anyone ever setting out to make it so. If you want an honest read of where yours stands, start with the Outside View.
Andrew Isaacs is a CIMA Member in Practice and Practising Certificate Holder, and the founder of AI Finance Partners, the outsourced finance function for professional services firms turning over £500k to £5m across the South East. Legal cashiering is not part of what we do.