Buying a business
Avoiding the Deal Breakers in Business Transactions
The issues that most often break a business sale, on the buyer's side and the seller's, and what each side can do to keep a deal together.
By Michael D. Rubin, CEO & Founder · Updated September 2026 · 746 words
Most deal breakers in a business sale are predictable: a buyer who cannot fund the purchase or runs out of patience, a seller with an unrealistic price or second thoughts, disputes over the fine print after the letter of intent, and a business whose results slip while it is being sold. Nearly all of them can be headed off early, by both sides, before they turn into reasons to walk away.
Buyer and seller usually settle price and basic terms before any formal documents are drafted. The trouble tends to start after that, when the details go on paper and each side's advisors begin to push.
Deal breakers at a glance
| Deal breaker | Usually starts with | How to prevent it |
|---|---|---|
| Financing falls short | Buyer | Arrange funding and equity before the offer |
| Search fatigue | Buyer | Set realistic timelines and clear criteria |
| Refusing to pay for a good fit | Buyer | Price the company on what it is worth to you, not on averages |
| Unrealistic price | Seller | Get an objective opinion of value before going to market |
| Second thoughts | Seller | Decide about life after the sale before signing anything |
| Rigid terms | Either side | Separate what really matters from what is merely preferred |
| Results slip during the sale | Seller | Run the business as if no sale were happening |
On the buyer's side
The most common buyer-side failure is money. A buyer who has not confirmed a loan, cannot raise the required equity or has not planned for working capital may reach the finish line and be unable to close. Arranging financing before making an offer is the single best protection.
Other buyer problems are about focus. Some buyers give their search too little time and quit, or chase companies without a clear reason for buying them. Others find a company that suits them unusually well but will not pay above what they consider typical, even though that fit is exactly what justifies a stronger price. Buyers who go without experienced advisors also tend to miss details that later become disputes.
On the seller's side
Sellers break deals with unrealistic price expectations, usually drawn from a number heard from a friend or from the sum the owner needs for retirement rather than from the company's earnings. Second thoughts are just as common, especially in family businesses, where the company is bound up with identity and family relationships. Owners who decide what they will do after the sale before going to market are far less likely to back out.
Sellers can also make negotiation hard by insisting on all cash at closing or by refusing reasonable representations and warranties, the written statements of fact about the business that the buyer relies on. Some stop cooperating with their own advisors, or let performance slide while their attention is on the sale, and a dip in results during due diligence invites a lower price. Our answer on maintaining performance while the company is marketed covers how to prevent it.
In the fine print
After the letter of intent, the purchase agreement must settle representations and warranties, indemnification (who pays if one of those statements proves wrong), employment or consulting terms for the seller, non-compete terms and what happens if either side breaches. These points can stall a deal that everyone agreed on in principle, and advisors sometimes make it worse by treating every clause as a contest. Good advisors know which points truly protect their client and which are habit, and they settle the second kind quickly. Our guide on what makes a sale fall apart in due diligence goes deeper on the late-stage risks.
Knowing when to walk away
Not every deal should close. If the buyer cannot finance the purchase, if due diligence uncovers a problem that changes what the business is worth, or if the two sides want fundamentally different things, ending it cleanly is better than forcing it through. Recognizing that point early saves time, money and goodwill, and leaves the seller free to return to other buyers while their interest is still warm.
How MDR & Associates keeps deals together
We represent sellers. We set a realistic value range before going to market, qualify buyers financially before they see any detail, negotiate multiple letters of intent at the same time so no single buyer holds all the leverage, and keep a principal of the firm in every negotiation. Whether you are an owner who wants a sale that holds together or a buyer interested in our companies, contact us.
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Questions owners ask next
Can a deal be saved after due diligence finds a problem?
Often, yes. The parties can adjust the price, move part of it into escrow or an earnout, have the seller fix the problem before closing, or add specific protection to the purchase agreement. What matters is raising the issue promptly and proposing a fair fix rather than using it to reopen every term.
Who decides when a deal is dead?
The buyer and the seller, each on advice from their own team. Advisors can recommend continuing or stopping, but the decision belongs to the principals. A good advisor tells a client plainly when a deal no longer serves their interests, even when walking away is disappointing for everyone involved.