Why some SMEs never sell
Introduction
Every year in Switzerland, hundreds of SMEs are put up for sale. Some find a buyer within a few months. Others remain on the market for years, never completing a transaction.
It's not a matter of luck. Nor of timing. Behind every failed sale, we generally find the same structural obstacles that make the business unsellable in the eyes of potential buyers.
These obstacles are not always obvious to the seller. After years of building their business, it's difficult to step back and identify what might put off a buyer. Yet, buyers evaluate an opportunity in seconds, and certain warning signs are enough to make them flee immediately.
Understanding why some SMEs never sell is not a theoretical exercise. It's a concrete analysis of recurring mistakes that compromise successions, even when the business has real potential. These obstacles can be anticipated, corrected, or at least mitigated if identified in time.
Here are the six main reasons that explain why an SME may remain unsold, and what they reveal about buyers' expectations.
📌 Summary (TL;DR)
An SME doesn't sell by chance. The obstacles are often structural: unrealistic valuation, excessive dependence on the owner, undocumented processes, opaque accounting, declining market or lack of preparation. These obstacles deter buyers and compromise the transaction, even if the business has real potential.
Identifying these obstacles in advance allows you to correct them and significantly increase the chances of completing a sale under favourable conditions.
📚 Table of contents
Unrealistic expectations on valuation
The main obstacle to selling an SME remains the gap between the value perceived by the seller and market reality. Emotional attachment distorts judgement: the owner values years of effort, personal sacrifices, future potential.
The market, however, only pays for measurable results: recurring turnover, demonstrated profitability, tangible assets. Refusing to consider sector multiples or comparables makes any negotiation impossible.
A factual valuation based on objective data is essential to anchor expectations in reality.
Excessive dependence on the owner
A business that cannot function without its founder is unsellable. When key client relationships, technical know-how and all strategic decisions rest on a single person, the risk is too high.
No rational buyer will invest in a structure that collapses as soon as the seller leaves. This dependence drastically reduces the value or completely blocks the transaction.
It's the first criterion analysed by buyers, as explained in our article on what buyers really look at first.
Non-existent or undocumented processes
Too many SMEs operate "in the boss's head". No written procedures, no technical documentation, no reproducible system. This situation makes the business untransferable.
The buyer cannot evaluate what they cannot measure. They cannot reproduce what is not documented. Without clear and transferable processes, valuation becomes impossible and the risk unacceptable.
A business without formalised operational structure remains an empty shell as soon as the owner leaves.
Opaque or unreliable accounting
Without reliable financial data, no serious transaction is possible. Approximate accounting, mixing of personal and professional expenses, absence of forecasts: these problems block any due diligence.
Banks refuse to finance an acquisition without accounting transparency. Buyers flee grey areas. Opaque accounting signals either poor management or a desire to conceal problems.
It's a prohibitive obstacle that causes the majority of attempted SME sales to fail.
A declining or overly niche market
Some businesses operate in sectors in structural decline or are so specialised that they interest no one. A profitable niche attracts buyers; an overly narrow market makes them flee.
Obsolete technologies, outdated business models or rapidly contracting markets drastically reduce the pool of potential buyers. Even when well managed, a business in a doomed sector remains unsellable.
Analysis of the market's growth potential is as important as the business's current performance.
Lack of advance preparation
Selling a business cannot be improvised. Sellers who decide overnight encounter multiple obstacles: insufficient valuation, missing documentation, operational dependence.
It takes 2 to 3 years to make an SME sellable: progressively delegate, document processes, stabilise revenues, professionalise management. This preparation maximises value and accelerates the transaction.
Consult our complete guide to selling your business and discover the fatal mistakes that cause a succession to fail.
An SME that doesn't sell is not necessarily a bad business. It's often a poorly prepared business. An unrealistic valuation, excessive dependence on the owner, undocumented processes, opaque accounting, a declining market or lack of preparation are all obstacles that deter buyers.
The good news? These obstacles are identifiable and correctable. With time and a methodical approach, you can transform your SME into an attractive opportunity for buyers. The key lies in anticipation: the more you prepare your business in advance, the more you maximise your chances of completing a transaction on the desired terms.
Start by objectively evaluating your business. Estimate the value of your SME free of charge to identify points to improve before putting it on the market. And if you need specific support, our network of experts can guide you through this preparation.
