RED FLAGS – This Deal Is Not Going to Close and the Buyer Isn’t Who You Thought They Were
Representing a buyer can be incredibly rewarding when they are prepared, informed and respectful of the acquisition process. Once you’re in contract, you expect momentum. You expect diligence to progress. You expect collaboration. You believe you’re finally heading toward a closing.
But every advisor eventually encounters a buyer who looks ready on the surface yet unravels the moment the real work begins. This type of buyer can derail a transaction not because the business is flawed, but because they fundamentally misunderstand what buying a small business entails.
Below are the warning signs that emerge when a buyer is not ready for the realities of ownership.
No business is perfect – Expecting small-business financials to resemble corporate accounting
Some buyers approach a main-street or lower-middle-market business expecting financials that look like a Fortune 500 audit package. Instead of understanding the normal messiness of entrepreneurial operations, they view any nuance as a problem.
Who is on the buyer’s team matters – a buyer who believes every line item should reconcile with corporate-level precision, and treats ordinary small-business financial practices as red flags – creates their own paralysis. A buyer who demands perfection in an imperfect world will never move forward.
Assuming that once you’re in contract, the deal is “basically done”
A serious buyer knows that signing a contract moves you into diligence — it doesn’t guarantee a closing. The wrong buyer behaves as though the contract itself is the finish line. They assume the seller must now prove perfection, accommodate rewrites and meet shifting standards.
This leads to endless questions, unnecessary complications, and no progress toward the actual objective. A good buyer is prepared to see the financials for what they are and understand the nuances of the business.
Constantly rearranging the process to fit their preferences
A major red flag appears when the buyer tries to rewrite the order of operations. In one instance, the buyer insisted on involving the landlord far too early, before financial due diligence was complete and before basic operational questions had even been addressed.
This not only puts undue exposure on the seller, but it signals that the buyer does not understand sequence, risk or standard procedure. When a buyer wants concessions at step four while they are still stuck at step one, the deal moves backward instead of forward.
Allowing uninformed advisors to steer the transaction
A buyer’s team is a reflection of their preparedness. When advisors lack transactional experience, they unintentionally sabotage the deal. If the buyer is relying on corporate or non-transaction attorneys, their advice can:
• Introduce irrelevant requirements
• Complicate simple items
• Reframe the transaction around unrelated issues
• Push the buyer into demands no seller can meet
• Stall the process instead of advancing it
This misalignment is dangerous. A buyer must have advisors who understand the process, or the process will fall apart.
Seeking perfection instead of viability
Some buyers can never get comfortable because they are searching for certainty that doesn’t exist. They treat every normal small-business nuance as a threat. They inflate minor observations into deal-breaking concerns. They want every risk neutralized before taking a step forward.
A buyer’s expectations must be rooted in the reality of entrepreneurship. Deals die under the weight of unrealistic thinking.
Failure to engage meaningfully in diligence
Due diligence is where momentum is built. A prepared buyer reviews materials, asks organized questions, and moves step by step toward closing. The wrong buyer:
• Reviews little or nothing
• Asks redundant or unfocused questions
• Cycles in confusion
• Drags the timeline
When due diligence drags on with poor communication, you are in trouble. It is rarely because information is lacking, but because the buyer does not know how to engage with it productively.
Inability to maintain forward motion
Transactions require rhythm. When the buyer cannot maintain that rhythm, the deal breaks. The wrong buyer gets stuck and unintentionally introduces distractions. Forward motion becomes impossible.
What this experience teaches
When representing a buyer, you can prepare them, guide them, evaluate their team, and set expectations — but you cannot force readiness. You cannot make someone understand small-business realities if they cling to corporate expectations. You cannot compensate for advisors who lack transactional skill. You cannot create momentum if the buyer keeps pumping the breaks.
Sometimes the best service you can offer a buyer is recognizing that they are not ready and protecting them — and the seller — from a prolonged, unproductive process.
Being under contract is not the finish line.
The finish line requires clarity, commitment, aligned advisors, respect for the process and the ability to move through uncertainty with confidence.
Schedule a consultation and let’s talk about your business.