Business Valuations for Buyers
What to look for in a seller
Business owners decide to sell their businesses for a number of reasons. It is important that individuals, companies or investors seeking to acquire a company conduct diligent investigations into the business entity, the existing owner, and that owner's history in operating the business.
Positive Characteristics of a Seller
- Well organized and orderly information (financials, executive summaries, collateral, etc)
- Optimistic and realistic about the future of the business
- Realistic asking price and terms
- Willingness to offer seller financing
- Open in assessing wins and losses for the business
- Proactively identifies any key areas of weakness or concern about the business
- Willing to stay on after purchase for transition and new owner support
- Long-term relationships with loyal employees and clients
Negative Characteristics of a Seller
- Recent negative trending financial performance
- Absence of a professional business appraisal
- Absence of a professional intermediary or investment banker
- Unwillingness to support post-acquisition transition
- Pending lawsuits
- High turnover rate with employees, clients, partners, and/or vendors
While financial performance is the primary component analyzed by a savvy business buyer, it is critical that many other factors be examined and considered when buying a business. Thoughtful due diligence and going the extra mile can make all the difference.
If you would like more information on buy side business appraisal work, please contact us today or call us at 877-VALU-BIZ.