He Believed His Business Was Unsellable. He Was Wrong by $13 Million.

He put a $100,000 clause in our agreement — payable if he decided to shut the company down instead of selling it. He wasn't convinced anyone would pay real money for his company, and he wanted a clean way out if he was right.

He could have been a caricature of an older entrepreneur, shoulders a little stooped, balding, but a live wire. At 80, he was only too eager to tell me how many ski runs he did every year and how much younger his biological age was than his actual age.

We met at the plant. Walking the floor, I was less concerned about the aging equipment than about how much of the space sat unused. The business could be run on a much smaller footprint. 

The math that quietly kills good companies

Here was his problem. The land under his West Coast plant was worth over $40 million, his father had bought that acreage generations earlier, back when nobody wanted it, in a place that had since become a hotbed for distribution centers. There was no way the current business could afford to pay market rate rent for that property now.

So, the open question was what to do with the business. His father had started it in the 1930s as a repair shop. Now over a hundred people worked for him, split between this plant and a second one in the Midwest. It did over $32 million in revenue, but it wasn’t profitable enough to justify running it on these ten acres of prime real estate. Whoever bought it would have to move the West Coast operation. And the seller was not convinced anyone would pay much for a company they'd have to pack up and relocate first.

We ran the other math for him. Liquidate – sell the equipment, sell the inventory, close the doors, pay us the $100,000 and be finished. Or, let us find a buyer that would pay more. The owner genuinely believed liquidating might net him about the same, or more, than a sale. That's what the clause was – a hedge against his own doubt, not a bluff.

Most businesses end this way. In 2022, roughly 510,000 small and midsize businesses exited the market. Ninety-two percent of them closed the doors. Five percent sold. Three percent transferred to a new owner (McKinsey Institute for Economic Mobility, “The Great Ownership Transfer,” 2026). Often not because the business had nothing left in it, but because the owner never finds a good way out. Good buyers are hard to find. Good deals with the right terms, even harder to complete. That 92% number is the reason I do this work.

What closing would actually have cost

We believed we could find a buyer that would pay more than the liquidation value. And the cost of closing a business runs far past the equipment and the inventory.

More than half this company’s workforce was over fifty, skilled tradespeople in a specialty most people have never heard of, in towns where that job doesn't get replaced by an equivalent job down the street. At least seven of them had fifty-year pins. Hundreds of customers depended on the company for parts nobody else made. And every paycheck, every local vendor invoice, and every contribution that company had made across eight decades would have stopped on the same Friday.

What happened instead

We found him a buyer with real industry experience, real capital, and the appetite to take on the move. It still took another eighteen months to close, by which time he was 82, mostly because at the eleventh hour, the man who had written a six-figure "I am absolutely done" clause discovered he wasn't ready to stop being needed. That's a story for another issue.

But it closed. The business sold for $13 million.

That is not what the equipment and inventory would have brought at auction. That is what a company is worth when a buyer can see a future in it. And the check was only part of what the deal bought.

The buyer relocated the West Coast operation to a nearby lower-cost site, something the seller had known for years needed to happen and had no appetite to take on himself, and kept the Midwest plant right where it was. Most of the jobs at both locations survived the transition. The doors stayed open. Customers kept getting their parts from the same company they had bought from for decades, and most never had to think about it at all.

And the growth the seller had been sitting on, the opportunities that needed capital and energy he was never going to spend in his eighties, went to somebody who has both.

None of that was the likely outcome. The likely outcome was an auction notice and a final Friday.

And the man who was ready to pay me $100,000 to make it all disappear walked away with $13 million instead, and got to watch his family’s legacy carry on to a new chapter.

The takeaway

A business that can't be transferred usually doesn't get sold at a discount. It gets closed. The work of making your company sellable is the same work as making it survivable.

So ask yourself: if you stopped tomorrow, is your company something another person could take over, or only something you'd have to discount, or close?

Before you go

I've turned the buyer's-side checklist I use into a short Business Worth Buying Scorecard, the same red flags a buyer's team looks for, so you can find them first. Grab it here.