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📌 Quick Summary
This episode explores why 70% of businesses never sell, what causes deals to collapse before, during, and after due diligence, and the steps owners can take — starting today — to maximize valuation. Guest expert Eric Ashburn breaks down the five biggest deal killers, explains what buyers truly evaluate, and provides a 12-month improvement plan for businesses at any stage.
❓ Common Questions & Answers
Q: Why don’t most businesses sell?
A: Messy financials, overreliance on the owner, customer concentration, overvaluation, and poor preparation.
Q: How early should exit planning begin?
A: Ideally 3–5 years before you intend to sell.
Q: Do service-based businesses face extra challenges?
A: Yes — because relationships and expertise often live with the owner, making transferability harder.
Q: What scares buyers most?
A: Risk: unpredictable cash flow, undocumented processes, and heavy concentration in a few customers.
Q: Can deals still die at the finish line?
A: Absolutely — financing issues, cold feet, or exhaustion can collapse a deal even at closing.
📜 Step-by-Step Guide
1. Get a Sellability Assessment
Benchmark business attractiveness, exit readiness, financial readiness, and owner readiness.
2. Clean Up Financials
Prepare 3–5 years of clean, defensible financial statements.
3. Document Core Processes
Sales, onboarding, delivery, billing, collections, and customer support.
4. Transfer One Key Responsibility
Pick one central task and train someone else to own it.
5. Reduce Customer Concentration
Diversify revenue streams and negotiate longer-term agreements.
6. Build Recurring Revenue Models
Subscriptions, retainers, maintenance plans — all increase valuation.
7. Prepare for Due Diligence Early
Assume buyers will look for reasons to walk away.
📖 Historical Context
Business sales historically follow a predictable pattern: owners underestimate the time required, overestimate value, and overlook the operational weaknesses buyers care about. Since the early 2000s, data from the Exit Planning Institute, BizBuySell, and private market surveys consistently show that most privately held businesses fail to sell — even when profitable — because the business is not built to operate without its owner.
🧭 Guest Journey Summary
Eric Ashburn began his career as a financial planner but quickly saw that most owners were missing the single biggest piece of their wealth: their business itself. After earning his CFP® and CEPA credentials, he specialized in helping owners grow value, build exit-ready companies, and avoid the painful surprises that destroy deals late in the process. Today, he consults nationwide, guiding entrepreneurs to create profitable, transferable, and regret-free exits.
🏢 Business Competition Examples
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A profitable construction firm fails to sell due to 65% of revenue coming from one client.
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A boutique consulting firm loses buyers when they learn the owner handles every major client personally.
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A tech startup receives offers only after restructuring financial statements to clearly separate personal and business expenses.
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A medical practice sells at a premium after successfully transitioning patient relationships to junior partners over a 5-year runway.
💬 Discussion Section
Buyers today are more sophisticated than ever. Private equity groups, strategic acquirers, and consolidators evaluate businesses not for what they are today but for the risk-adjusted future cash flow they can expect. Transferability is at the heart of modern valuation. If the business depends on one person, one customer, or one undocumented process, the perceived risk skyrockets.
Owners often mistakenly assume that profitability alone determines value. In reality, predictability beats profitability every time. Clean books, documentation, recurring revenue, and diversified customers all reduce risk — which directly increases multiples.
This episode also highlights the emotional dimension. Many owners regret selling because they did not prepare for life after the exit. Without a purpose, community, or next chapter, even a well-priced sale can feel like a loss.
⚖️ The Debate
Should owners focus on minimizing taxes or maximizing reported profit?
Eric argues that while tax minimization is smart during growth years, it can dramatically reduce valuation during a sale. Buyers pay for documented profit — not theoretical add-backs.
Is it possible to sell a business built entirely around the owner?
Experts disagree. Some say personality-driven businesses can never become transferable. Others argue that with a long enough runway — typically 3–7 years — clients can transition successfully to a team.
Are due diligence failures inevitable?
Some believe every business will face surprises; others argue that sufficient preparation eliminates 90% of issues.
✅ Key Takeaways
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70% of businesses never sell — but the problems are preventable.
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Owners relying on themselves create the biggest deal killer.
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Clean financials matter more than almost anything else.
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Buyers evaluate risk, not stories or potential.
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Exit planning should begin years before you think you need it.
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Transferability is the foundation of valuation.
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Recurring revenue dramatically increases multiples.
⚠️ Potential Business Hazards
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Customer concentration over 20–30%
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Undocumented financial add-backs
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Key-person dependency on the owner
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Processes living only “in your head”
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Overvaluation and unrealistic expectations
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Emotional unpreparedness leading to seller regret
❌ Myths & Misconceptions
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“My business is different — buyers will see the value.”
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“I’ll just sell when I’m ready.”
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“Buyers understand owner add-backs.”
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“I don’t need clean financials; they can figure it out.”
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“Service businesses can’t be sold.”
📚 Book & Podcast Recommendations
From the episode themes:
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Built to Sell — John Warrillow
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The E-Myth Revisited — Michael Gerber
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Walking to Destiny — Chris Snider
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Traction — Gino Wickman
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The Exit Strategy Podcast
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Business Exit Stories Podcast
⚖️ Legal Cases
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Hampton v. PNC Bank (2019): Highlights how poor documentation and misrepresented financials can void acquisition agreements.
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Roth Steel Tube Co. v. Commissioner: Reinforces the importance of clean separation between personal and business expenses.
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Various SBA Loan Denial Precedents: Demonstrate how customer concentration risk leads lenders to block financing — killing deals.
📣 Expert Invitation
If you are an expert, founder, or entrepreneur and would like to be featured on a future episode of Inventive Fireside or Inventive Journey, you’re invited!
👉 Apply to be a guest at inventiveunicorn.com
👉 Book a strategy meeting at strategymeeting.com
🔚 Wrap-Up Conclusion
Eric Ashburn delivers an insightful breakdown of the real obstacles preventing most businesses from selling. With clear frameworks, actionable steps, and a practical mindset shift, this episode equips business owners to reduce risk, increase value, and build an enterprise that thrives beyond them. Whether you plan to sell soon or simply want a stronger company, the principles shared here will serve you well for years to come.
