Selling a business should be the reward for years of risk-taking, sacrifice, and leadership. But for many business owners, the sale often doesn’t go as planned.
Picture this: A business owner spends 30 years building a successful company. A qualified buyer shows interest, a price is agreed upon, and attorneys and advisors begin due diligence. Six weeks later, the deal falls apart. The financial records weren’t clean, customer contracts couldn’t be transferred, or the owner wasn’t ready to let go.
This scenario is far more common than people realize. Roughly 70%–80% of privately held businesses never sell. And among those that do, three out of four owners regret the outcome within 12 months. The financial and emotional toll can be crushing.
So, what’s causing these failures, and how can you as a business owner can protect yourself? Our article includes seven of the most common landmines that can sink business sales, along with questions owners often ask and proactive steps to avoid them, with the assistance of a San Antonio CFP ® who specializes in working with business owners.
Landmine #1: Overconfidence in Value
Common Pain Point / Question: “I know what my business is worth. Why should I pay for a valuation?”
Many owners rely on gut feel, industry rumors, or informal opinions to estimate value. Unfortunately, this often leads to unrealistic expectations. Buyers are evaluating financial performance, risk, cash flow quality, and future potential, rather than sentiment or sweat equity.
Suggested Solution:
Obtain an independent valuation well in advance of planning to sell; ideally, three to five years prior. This gives you time to make operational or financial adjustments that can increase enterprise value rather than reacting under pressure when the buyer is already at the table.
Listen to our podcast on: Business Exit Planning Essential Steps for a Successful Transition
Landmine #2: Weak Financial Records
Common Pain Point / Question: “We run a profitable business—why do I need to clean up the books?”
Buyers of your business are looking for clarity and transparency. If your financials are incomplete, commingled, or inconsistent, it signals risk, and risk can reduce value or even kill a sale.
Examples of business bookkeeping issues include:
- Unverified revenue
- Unclear add-backs
- Lack of audited statements
- Poor expense tracking
Suggested Solution:
Review and upgrade your financial reporting well in advance of going to market. Work with your CPA and a financial advisor in San Antonio experienced in exit planning to implement:
- Clean P&Ls and balance sheets
- Separate personal and business expenses
- Documented accounting practices
Accurate and well-organized records support a smoother due diligence process and greater negotiating power.
Listen to our podcast: “Building Wealth Through Business Ownership.”
Landmine #3: Overreliance on the Owner
Common Pain Point / Question: “How do I sell a business if I’m the one holding everything together?”
If your business can’t run without you, a buyer could see that as a considerable risk, not a value. When you’re the rainmaker, decision-maker, and/or central operations hub, it’s possible that transferring your company may be very difficult.
Suggested Solution:
Begin shifting key responsibilities to a leadership team or documented systems. A buyer needs to see that the business will run successfully after you exit.
Consider these steps:
- Training one or more second-in-command leaders
- Documenting processes
- Building recurring revenue where possible
The more the business runs without you, the more attractive (and valuable) it becomes.
Landmine #4: Customer Concentration
Common Pain Point / Question: “Is it really a problem if one client makes up 40% of our revenue?”
Yes. Heavy dependence on a few customers can make a buyer nervous. If a major client were to leave, revenue could be severely impacted, resulting in immediate value loss.
Suggested Solution:
Work proactively to diversify revenue. Strategies may include:
- Expanding into new markets
- Growing smaller accounts
- Adding cross-sell or upsell opportunities
Buyers will pay a premium for companies with balanced and predictable revenue streams.
Landmine #5: Ignoring Tax Planning
Common Pain Point / Question: “I’ll deal with the taxes after the sale; why worry now?”
This mistake can cost you, as an owner, hundreds of thousands of dollars. The structure of the sale: asset sale vs. stock sale, installment vs. lump sum, entity type, and timing, can have significant tax implications.
Suggested Solution:
Build a tax planning strategy in advance, ideally with a San Antonio fiduciary financial advisor, CPA, and exit planning professional collaborating. Thoughtful planning can help business owners keep more of the proceeds by:
- Structuring the sale thoughtfully
- Leveraging tax-efficient exit strategies
- Coordinating personal and business tax planning
Remember that taxes should never be an afterthought.
Landmine #6: Poor Timing
Common Pain Point / Question: “When is the right time to sell my business?”
Many owners wait until they are burned out, declining in health, or the business is losing momentum. Buyers want growth and potential, not a company on autopilot or in decline.
Suggested Solution:
Start preparing three to five years in advance of your intended sale. Monitor internal and external timing factors such as:
- Industry cycles
- Revenue and profit trends
- Market demand
- Personal readiness
Don’t wait for a crisis to occur. Sell from a position of strength.
Landmine #7: Emotional Unreadiness
Common Pain Point / Question: “What if I sell… and regret it?”
Many owners underestimate the extent to which their identity is tied to their business. Without a plan for what comes next, the transition can feel confusing, empty, or disappointing.
Suggested Solution:
Plan not just for the business sale, but for your next chapter. A complete exit plan should include:
- Purpose and lifestyle planning
- Family and legacy considerations
- Wealth management and income strategy
Selling the business is a financial transaction. Leaving the business is a personal transition. Both require preparation.
How PAX Financial Group Helps San Antonio Business Owners Prepare for a Successful Exit
Selling your business is likely one of the most significant financial decisions of your life. PAX Financial Group helps San Antonio business owners build a strategic exit plan that aligns the business, the sale, and the life you want after the transition.
Our approach includes:
- Preparing the business for a stronger valuation
- Coordinating tax, investment, and financial planning strategies
- Designing income and wealth planning for life after the sale
If you’re a business owner in San Antonio considering selling your business within the next 3–5 years, now is the time to prepare before the clock starts ticking and options narrow.
Ready to discuss your business exit planning needs? Talk with our team today.
References
- InvestmentBank.com, “Only 30–40% of Businesses Actually Ever Sell,” 2024; GAP Advisors, “The Cost of Failure,” 2024.
- Exit Planning Institute, Owner Regret Study, 2023.
- GF Data, Industry Valuation Report, 2024.
