What may be contrary to our assumptions, studies have shown that most business purchases do not succeed. Sometimes, the best deal is the one that does not occur. To avoid closing a bad deal, the purchaser should be on the lookout for certain red flags. Some are obvious, such as substantial litigation, declining revenues and profits and a seller that engages in a particularly risky enterprise, such as one that regularly transacts business with environmental issues. Some red flags, however, are not so obvious. Red flags that are more subtle, but that can spell disaster for a business combination, include 1) a lack of symmetry in business culture between the purchaser and the seller; 2) the seller’s lack of proper recordkeeping, whether of financial books and records, corporate documents, human resources files or otherwise; 3) a seller who is unable to express a rational reason for sale; and 4) a seller who appears recalcitrant in their position and/or somewhat aloof in the negotiation process. These last two items should especially be evaluated early in the process. Otherwise, you could be negotiating with a seller who is not “all in”, wasting months of time and resources on a fruitless endeavor.