“Failure is so important. We speak about success all the time. It is the ability to resist failure or use failure that often leads to greater success. I’ve met people who don’t want to try for fear of failing.” – J.K. Rowling

IBA has successfully sold more privately held companies and family businesses than any other firm in the Pacific Northwest.  We are collectively proud of the nearly 4400 transactions the company has facilitated since 1975 in Washington & Oregon.

IBA has also had more than 100 transactions over the last fifty years that failed to get across the finish line with a seller receiving a “bag of gold” and the buyer receiving “control of the helm”.  The reality is you learn more from failure than success.  Failure provides an opportunity to learn and modify strategies.  Every entrepreneur has made a wrong hire, spent money on an ineffective marketing program, or provided a good or service that required a warranty repair or a return visit to the customer. Every business broker at one time or another will price a business incorrectly, communicate inarticulately, or employ a strategy that does not end in the desired result.

A value provided by a firm with IBA’s robust history of activity to its clients is that these experiences are shared and “submerged rocks” in the river that have sunk boats on previous journeys toward closing are navigated around.

IBA is blessed to have worked with many of the top attorneys, accountants, and bankers in the region on transactions. We willingly share access to our Rolodex of professionals to anyone in need of a referral. These parties have also experienced transactional failures in their domains of expertise that IBA has witnessed.  Knowledge of these experiences is also shared with clients.

I am often asked why do business sales fail?  The following is a list of common reasons.

1. Business Pricing – The value of a business needs to be justified to a buyer, their CPA/CFO, and a bank and/or investors.  A top tier business broker should be able to provide a professional opinion of the anticipated market value of a company within 10% of the eventual sale price.   IBA offers a complimentary professional opinion of the market value of businesses to potential clients.  We do this to allow potential clients to assess our knowledge, experience, customer service, and learn what their business is worth without cost or obligation to use IBA.  If we cannot articulate, “Why IBA”, then an entrepreneur should not use IBA for the sale of their business.  On our side, we do this because our 100% paid on performance business model does not work if we are not completing transactions.   We do not wish to take on a project that will not sell.  Annually, IBA sells 80 – 90% of its engagements.

Broker Note:  Business sale intermediaries who charge for business valuations will often provide prices they cannot deliver in the market. They seek to have a happy customer with their deliverable for four or five figures.  Business brokers who do not price their listings, often do not have the knowledge & experience to complete the valuation activity.  It is our belief at IBA that it is superior to have a price that can be justified than one where control for initiating negotiations is handed to the buyer.

2. Professional Negotiations – It takes knowledge, experience, and skill to get parties to “Yes”.  It is beneficial to employ a business broker who has sold businesses in the relevant industry, geographic location, and value range.  There are situations where 1 in 2 business brokers can successfully negotiate, 1 in 5, 1 in 10, 1 in 100, 1 in 1000, etc.  Having the right business sale intermediary on your team matters most when emotions are high and problem solving solutions are scarce.
3. Due Diligence – A deal starts with a handshake, it completes with an executed purchase & sale agreement and money changing hands. Due diligence verifies the information provided that resulted in a handshake.  If this process is not facilitated correctly concerns can fester and transactions develop fatal wounds.
4. Legal – It is the job of attorneys to mitigate liability for their clients. Entrepreneurship has inherent risks.  Knowing what is standard and reasonable for an industry and transaction can be the difference between a “go and no go” for a transaction.
5. Landlord – The landlord for a business traditionally does not care whether a transaction happens or not. A real estate licensed business broker can frequently professionally facilitate occupancy related leasing situations to satisfy the buyer, their bank, and mitigate trailing liability for the seller.  If they cannot, a landlord can be the Achilles heel that results in failure for a transaction.  The following previously published article covers why it is prudent to select a business broker who has a real estate license for the state where the business is located:  https://ibainc.com/blog/gregory-kovsky/advice-for-an-entrepreneur-selling-business-and-real-estate-assets-at-the-same-time/
6. Financing – “He who has the Gold makes the rules”. A buyer who cannot secure financing or the necessary investment has a high probability of not completing a transaction.  Buyers should be sufficiently vetted prior to commencing negotiations.  This is a responsibility commonly delegated to a business broker. The following article provides some thoughts on what to look at when vetting a potential buyer for a business:  https://ibainc.com/blog/gregory-kovsky/why-a-business-owner-should-review-the-buyers-personal-financial-statement-or-balance-sheet-before-starting-negotiations/

It is not if you will fail, everyone does.  It is how you respond and grow from the experience.  Every business broker on the IBA team working out of our nine offices in Washington & Oregon has experienced failure.  Luckily, firm successes are 10 fold or more greater than our failures annually.  If you are considering the sale of a privately held company or family business in 2025, we would welcome the opportunity to learn about your company, exit strategy  objectives, and provide an overview of our client services.  All conversations with IBA are held in strict confidence.

IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, real estate, legal, accounting, banking, and wealth management communities on subjects relevant to the purchase & sale of privately held companies and family businesses.  IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.