As a business broker in the Triangle, I have the opportunity to bring buyers and sellers together for the consummation of a deal. With a deal being the exchange of money for equity, there are a lot of things that have to work out right, and a lot of things can go wrong. Many sellers feel the need to celebrate when the contract is signed, but a signed contract is basically just entering the “Red Zone” in NFL parlance; it’s anything but a touchdown. There’s a lot that can go still go wrong.
And so without further ado, let’s explore some of the top reasons why deals go sideways after a contract is formed…
Random Acts of Unkindness
While uncommon I’ve heard and seen many stories of drastic circumstances resulting in a significant shift in buyer motivation. “Time Kills All Deals”, and deals take time, but time allows for events like fires, PR disasters, Legal issues, or personal issues like a death in the family to occur.
Example: Imagine the repercussions of an employee dying due to a workplace accident to a deal that’s under contract. These things happen.
A good business broker will strike while the iron is hot with deadlines for due diligence and manage the transaction by staying on top of deliverables owed from both parties to limit the time available for random acts of unkindness.