As a prospective business buyer are you concerned about pitching into the business sales market knowing that most businesses have recently been doing it tough and worried that sellers will try to window-dress the results?
A few thoughts from those of us who sit between business buyers and sellers:
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Nothing new under the sun here! Buyers have always been cautious about everything they’ve been told and sellers have always tried to put the best shine on the business. Buyers who make successful acquisitions make a measured assessment of the risks.
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One of the many factors in coming to a business valuation is historical performance – there are plenty of others.
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Asking the same questions lots of different ways will help to uncover exaggerations e.g. ‘How long have your top 10 customers been with you’ and ‘I’m thinking of the 80/20 rule – where does 80% of your revenue come from now, compared to 2 years ago’ are both delving into customer retention
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Revenue is not the only measure of success in tough times; think payment terms, customer retention, online vs instore sales, contracts / preferred supplier status vs on-offs.
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