Whether it's a change in personal circumstances, burnout or simply a realization that it's "the right time", a challenging economy often results in a rash of businesses being put up for sale.  But the reality is that many deals fall apart, with industry statistics suggesting that only 30% of businesses put up for sale are ever actually sold. Given those sobering statistics, it's important to have a game plan to succeed.

To do so, consider the following strategies:

Quantify Value Based On Cash Flow:  Many deals fall apart simply because they make very little economic sense. A buyer may pay a premium for the future strategic value of the business, but the starting point for a business owner is to understand the current value of their businesses, based on the cash flow that it's generating. Helping your client get a realistic handle on the value of their business and likely deal structure helps set expectations and drive the decision of whether or not a sale makes sense.

Target The Right Buyer:  Value is truly in the eyes of the beholder and typically varies widely, depending on the type of buyer. For example, a direct competitor acquiring a company simply to put it out of business is unlikely to pay nearly the price that a company located in another geography seeking market access would likely pay. Your client needs to take advantage of changes in their industry to target buyers for whom value is greatest.

Address The Good, The Bad and The Ugly:  All businesses have problems. The natural inclination is to duck or defer the inevitable discussion with buyers about these issues. A better strategy is to work with buyers who are in the best position to deal with these problems and put the issue on the table early on in the discussion.

Use Creative Deal Structure to Close the Price Gap:  Often the price gap between buyer and seller can be narrowed by structuring contingent payments based on the business hitting agreed-to milestones. This approach can be effective, particularly as the economy improves, however milestones need to be controllable and verifiable by the seller.