February 10th, 2011 David Finkel (Taxloopholes.com Advisor)
Have you ever thought about selling your business? Ever dreamed of what it might mean for you?
Today I wanted to share with you the 6 key risks from a BUYER’s perspective so that you can take steps now to mitigate these risks and make your business more valuable.
1. Management team: How talented are the managers? Will they stay? What happens if one or more leave? Who will lead the enterprise as a whole?
2. Reliance on owner: Will this business work well without you (the owner) around? Which customers rely on your personal relationship to keep them happy? What banking relationships are based on Buy Propecia your personal financials or rapport with a specific banker?
3. Truth and accuracy of financial records: Are your financial records clean and up to date? Have your financials been audited by outside firms? Are there any warning flags like discrepancies between corporate tax returns, filings, or investor reporting and the company financials?
4. Customer base (concentration and future prospects): Are the customer relationships with the company or with the owner? Is any one customer so big that the business would suffer if that customer’s orders diminished or went away altogether? What are the future prospects for your key customers? Your industry? Your specific business?
5. Competition: Where does your company stand in the marketplace compared to your competitors? How will you assure your prospective buyer that sales and market share can grow, not just be maintained?
6. Industry future: What trends affect your industry? What potential disruptors could kill your industry overnight? What contingencies do you have for these scenarios?
The bottom-line question is this: “Are you taking action to mitigate as many perceived buyer risks as possible over the next two to three years before you sell?