Why won't my business sell? The usual reasons, and what to fix first

What do brokers say stops deals from closing?

The best broker data we could find comes from the International Business Brokers Association (IBBA) and M&A Source, which represent business brokers and merger and acquisition advisors. Their Market Pulse report for the fourth quarter of 2022 collected 493 responses in January 2023 from people involved in business sales, mostly IBBA or M&A Source members. It is the latest full report we found that the IBBA has made public and that asks this question, so read the figures as a pattern, not as today's numbers.

The table shows the lowest and highest share each reason got across five deal-size bands, from under $500,000 to $50 million. The bracketed notes and the right-hand column are our reading, not the IBBA's.

Reason brokers gave	Share of answers	Mostly yours to change?
Unrealistic seller value expectation (the owner wants more than buyers will pay)	22% to 26%	Yes
Poor financials	9% to 20%	In part
Economic uncertainty	14% to 20%	No
Financing (the buyer can't raise the money)	11% to 15%	In part
Unrealistic buyer value expectation (the buyer expects too low a price)	9% to 14%	No
Deal fatigue (the deal drags on and one side loses patience)	8% to 11%	In part
Lack of seller preparation	7% to 9%	Yes

• Price comes first. Unrealistic seller value expectation was the most common answer in every deal-size band. The IBBA's Q3 2019 summary also ranked unrealistic value expectations first.
• Poor financials weigh most on the smallest sales. They got 20% of answers for deals under $500,000, and 9% for deals of $5 million to $50 million.

How early do most owners start planning?

In the IBBA and M&A Source Q2 2026 Market Pulse survey, brokers and advisors reported that, across five deal-size bands from under $500,000 to $50 million, between 60% and 90% of sellers had completed less than a year of exit planning (getting ready to sell), or none at all. Most owners, in other words, start planning late.

The five things you can work on

In our reading, buyers and lenders look hardest at five things, and you can work on each. Your role, your customers and your paperwork are not on the IBBA's list above. The numbers give the order to work in, not how often each ends a sale, and not all can be fully fixed before you list.

1. The buyer can't verify the earnings

For example, an owner says the business makes $400,000. The tax return says $180,000. In a case like this, the gap is often owner pay, personal costs and one-off expenses spread across three years of statements, and nobody has written them down.

Small-business accounts are prepared for tax reporting, not to show a buyer the cash flow available to an owner. Recasting presents the same records in the way buyers and lenders assess them.

A buyer might take your word. A lender usually won't. For a purchase financed with a loan backed by the U.S. Small Business Administration (SBA), SBA's rules (its lender rulebook, SOP 50 10 8.1) require the seller's financial statements for the last three complete fiscal years (fewer if the business is younger), and the lender must check the figures against IRS tax records. Figures that can't be proved can stall the loan, and the sale with it.

Fix: recast three years of financials, with every adjustment documented. See seller's discretionary earnings (the total cash the business produces for its owner) and add-backs (personal or one-off costs you remove from expenses).

2. The business is the owner

The customers call your mobile. You price every job. The one supplier who matters is a friend of thirty years. A buyer looks at that and sees a job they would have to learn from you, with customers who may leave when you do.

Fix: this usually takes longest, so start early. See how to make your business run without you.

3. The paperwork won't transfer

A lease with eight months left and no right to transfer it to a new owner. A license in the owner's personal name. A key contract that ends on a change of ownership. These surface late, when the buyer's lawyer reads the documents, and can kill a deal that was otherwise agreed.

Fix: read your own documents before a buyer does. See the documents buyers and lenders ask for.

4. Too much revenue from too few customers

Say one customer makes up 35% of your revenue. That is a risk a buyer has to price, perhaps by offering less or by holding back part of the payment until they see whether the customer stays.

Fix: you often can't change the numbers quickly, but you can change how risky they look. See customer concentration.

5. The price has nothing behind it

"I need $2 million to retire" is a fact about the owner, not the business. A price the earnings can't support tends to draw few serious inquiries. The listing can go stale, and buyers may start to wonder what is wrong with it.

Brokers name this one most often, yet it comes last in the fix order because it rests on the other four.

Fix: base the price on recast earnings and on what similar businesses have actually sold for. See what is my small business worth?

If your price and buyers' offers still don't meet: seller financing (you are paid part of the price over time) or an earn-out (part of the price depends on later performance) can bridge it. Both move risk onto you, and a buyer's lender may limit them: SBA's rules, for example, prohibit seller earn-outs in 7(a) loans that finance buying a business. See selling to a buyer with an SBA loan, and ask your CPA or lawyer what fits.

What to fix first

Order	Fix	Why this order
1	Financial records	Your price, and a lender's decision, rest on knowing the real earnings
2	Owner dependence	Usually the slowest to change, so begin it alongside the records work
3	Paperwork	Quick to check, and fixes can take time (a landlord may be slow to agree)
4	Customers	Mostly a matter of analysis and contracts
5	Price	Last, because it rests on the other four

If your business is already listed and not selling

Ask your broker what buyers said when they walked away. It shows whether the problem is the business, the price or something outside your control.

Some fixes, like organizing documents, can be made while you stay listed. Others, like making the business run without you, can take months, so ask whether a pause is worth it.

Where to start

Go through this list with your last three years of records open, and start with the first item you can't tick.

• Your earnings are recast, with every adjustment documented
• Your tax returns and financial statements agree, or the gap is explained
• The business could run for two weeks without you
• Your lease, licenses and key contracts can pass to a buyer
• You know what share of revenue your largest customers make up
• Your price rests on recast earnings and real sales of similar businesses

Keep reading

• Checklist for selling a business: how to prepare it for sale
• What is my business worth? How to value a business for sale
• How to make your business run without you

This guide is general information, not tax, legal or valuation advice. Every business is different: talk to your accountant, lawyer and broker about yours.