{"id":561150,"date":"2015-03-23T16:38:43","date_gmt":"2015-03-23T20:38:43","guid":{"rendered":"https:\/\/vrbbd.wpengine.com\/vrbbmadison\/devil-may-details\/"},"modified":"2022-01-31T12:43:56","modified_gmt":"2022-01-31T17:43:56","slug":"devil-may-details","status":"publish","type":"post","link":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/devil-may-details\/","title":{"rendered":"The Devil May Be in the Details"},"content":{"rendered":"<p>When the sale of a business falls apart, everyone involved\u00a0in the transaction is disappointed \u2013 usually. Sometimes\u00a0the reasons are insurmountable, and other times they are\u00a0minuscule \u2013 even personal. Some intermediaries report a\u00a0closure rate of 80 percent; others say it is even lower. Still other\u00a0intermediaries claim to close 80 percent or higher. When asked\u00a0how, this last group responded that they require a three-year\u00a0exclusive engagement period to sell the company. The theory\u00a0is that the longer an intermediary has to work on selling the\u00a0company, the better the chance they will sell it. No one can\u00a0argue with this theory. However, most sellers would find this\u00a0unacceptable.<\/p>\n<p>In many cases, prior to placing anything in a written document,\u00a0the parties have to agree on price and some basic terms.\u00a0However, once these important issues are agreed upon, the\u00a0devil may be in the details. For example,\u00a0the Reps and\u00a0Warranties may kill the deal. Other areas such as employment\u00a0contracts, non-compete agreements and the ensuing penalties\u00a0for breach of any of these can quash the deal. Personality\u00a0conflicts between the outside advisers, especially during the<br \/>\ndue diligence process, can also prevent the deal from closing.<\/p>\n<p>One expert in the deal-making (and closing) process has\u00a0suggested that some of the following items can kill the deal\u00a0even before it gets to the Letter of Intent stage:<\/p>\n<ul>\n<li>Buyers who lose patience and give up the acquisition search\u00a0prematurely, maybe under a year\u2019s time period.<\/li>\n<li>Buyers who are not highly focused on their target companies\u00a0and who have not thought through the real reasons for\u00a0doing a deal.<\/li>\n<li>Buyers who are not willing to \u201cpay up\u201d for a near perfect fit,\u00a0failing to realize that such circumstances justify a premium\u00a0price.<\/li>\n<li>Buyers who are not well financed or capable of accessing\u00a0the necessary equity and debt to do the deal.<\/li>\n<li>Inexperienced buyers who are unwilling to lean heavily on\u00a0their experienced advisers for proper advice.<\/li>\n<li>Sellers who have unrealistic expectations for the sale price.<\/li>\n<li>Sellers who have second thoughts about selling, commonly\u00a0known as seller\u2019s remorse and most frequently found in\u00a0family businesses.<\/li>\n<li>Sellers who insist on all cash at closing and\/or who are\u00a0inflexible with other terms of the deal including stringent\u00a0reps and warranties.<\/li>\n<li>Sellers who fail to give their professional intermediaries\u00a0their undivided attention and cooperation.<\/li>\n<li>Sellers who allow their company\u2019s performance in sales and\u00a0earnings to deteriorate during the selling process.<\/li>\n<\/ul>\n<p>Deals obviously fall apart for many other reasons. The reasons\u00a0above cover just a few of the concerns that can often be\u00a0prevented or dealt with prior to any documents being signed.<br \/>\nIf the deal doesn\u2019t look like it is going to work \u2013 it probably isn\u2019t.\u00a0It may be time to move on.<\/p>\n<p><em>\u00a9 Copyright 2015 <a href=\"https:\/\/wrightco.net\">Business Brokerage Press, Inc.<\/a><\/em><\/p>\n<p><em>Photo Credit: <a href=\"https:\/\/www.morguefile.com\/creative\/jppi\">jppi <\/a>via <a href=\"https:\/\/www.morguefile.com\">morgueFile<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>When the sale of a business falls apart, everyone involved\u00a0in the transaction is disappointed \u2013 usually. Sometimes\u00a0the reasons are insurmountable, and other times they are\u00a0minuscule \u2013 even personal. Some intermediaries report a\u00a0closure rate of 80 percent; others say it is even lower. Still other\u00a0intermediaries claim to close 80 percent or higher. When asked\u00a0how, this last [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":561151,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[4,5,3],"tags":[],"class_list":["post-561150","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-buyer-articles","category-seller-articles"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/posts\/561150","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/comments?post=561150"}],"version-history":[{"count":0,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/posts\/561150\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/media\/561151"}],"wp:attachment":[{"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/media?parent=561150"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/categories?post=561150"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbmadison\/wp-json\/wp\/v2\/tags?post=561150"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}