Is it true that 80% of businesses don't sell?

The figure is attributed to the Exit Planning Institute (EPI), a US professional body for exit-planning advisers. In material accompanying its State of Owner Readiness research, EPI states that only 20–30% of businesses that go to market actually sell, “leaving up to 80%” without solid options. The “80%” is therefore the remainder of that range, not a separately measured figure.

The context is the American business market, where EPI's research focuses on the number of businesses owned by retiring baby-boomer owners and on how prepared those owners are to exit.

Some businesses have genuine saleability problems: dependence on the owner, concentrated customers, declining trading or unreliable financial information. Others fail to sell because of the value expected, the buyers approached, how the opportunity was positioned, how actively the process was run, the timing, or a deal that collapsed late.

More importantly, an unsuccessful sale does not establish that the underlying business was inherently unsaleable. The outcome may also have been affected by value expectations, buyer strategy, buyer coverage, positioning, execution or a particular transaction that subsequently collapsed.

In our experience, many businesses that fail to sell are not inherently unsaleable. The outcome can be affected by value expectations, timing, positioning, buyer coverage and the sale process itself.

So the question to ask is: was the problem the business — or the way it was sold? The previous process deserves scrutiny: the valuation, the buyer research, how many relevant buyers were approached directly, the feedback received and whether the strategy was adjusted.

The useful question isn't simply how many businesses fail to sell.

It's why yours didn't.