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Sep 29
2007
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Usual Suspects: What Buyers Want to KnowPosted by Dan Doran in Untagged |
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Invariably, there is a common set of questions that every savvy buyer will ask of a company as they are evaluating an acquisition. From a seller's perspective, the more prepared you are to answer (and the better answers you have) , the better your sale prospects.As a general statement, buyers have two motivations:
- Maximize Post Sale Profits / Returns
- Minimize Risk
So what do they ask?
- If the business is so great / profitable / has such potential, why are you selling?
- If you didn't sell, what would you be doing?
- How can I grow the business?
- What revenues do you project for the next 1-3-5 years?
- Do your employees / managers / key personel know about the sale?
- Have you told your vendors?
- Have you told your customers?
- How will your vendors / customers react?
- How much risk is there of losing sales when you leave?
There is no right or wrong answer here, but keep in mind the goals of the buyer. Any answer that either increases risk or decreases potential returns / profits for the buyer will decrease the sale price or the likelihood of a sale.