Buyer and Seller : Be Ready For Sell Your Business With Due Diligence
Supply Sources : If the company prides itself on its low cost of raw materials, how solid are its sources? What if their nuts and bolts come from one supplier, and this supplier is in China? A company using a special formula from one supplier is vulnerable to a change in supplier relations (an increase in price) or an interruption in supply due to who knows what.
ShortTerm Contracts: Reviewing the customer contracts may reveal that they are, for the most part, short term. If the contracts are with major customers, these customers may require extra service or even deep discounts. It costs much less to keep one existing customer happy than it costs to obtain a new one.
Product Diversity : Singleproduct companies are at a much greater risk due to competitive products and competitive pricing. Supply sources also create risk.
Customer Concentration: This is included in all sorts of lists of concerns whether it's valuing, buying, or selling a business. However, it is a serious issue. Companies with just one or two major customers are at great risk. The loss of only one or two major customers could then impact the company's very survival.
ThirdParty Approval : Franchises may be a good Mergers and Acquisitions Business for Sale with good business opportunity, but when it comes to selling, being a franchise may present a real obstacle. The franchiser usually has the right to approve the buyer and may impose other conditions such as an overhaul of the facility or a complete facelift. Franchisers may also have the first right of refusal, which makes it more difficult to sell. Most buyers don't want to compete with a franchiser and the more difficult the franchiser, the more likely the buyer is to drop the deal. Other factors that may impact the valuation are: ESOP ownership too many owners; inventory too much or dated inventory can present a problem; and intangible assets patents, copyrights, brand names, goodwill, etc. may have great value but can be very difficult to quantify. For More Details and Advices For Your Business Visit Us Now : www.ebitassociates.com