Your industry partly determines the value of your company. For example, cloud-based or software-as-a service companies are generally worth a lot more than printing companies these days. Nevertheless, there are also major variations in valuation for companies in the same industry. From analyzing some of the...
In my previous blog I shared five questions that almost every buyer asks about a business that they are considering buying. Here are five questions that buyers should ask, but often don’t. When did the owner decide to sell the business? Business buyers always want to know...
The average business buyer goes into the process with a list of questions to ask the seller. So if you plan to sell your business someday, here are five questions that almost every buyer is going to ask you. In my next blog I will write...
10. Economizing on due diligence Many buyers fail to dig into due diligence, which is the time to really learn about what you are about to acquire and whether or not it fits your company and your strategy. It’s time consuming and can be expensive, but...
9. Falling in love with the deal It’s not unusual for an owner or executive to fall in love with the opportunity to close a deal with a target company and not see the red flags. They might be focused on a short term boost in...
John Austin will be a presenter at the annual Austin Planners Conference, hosted by the Financial Planning Association of Austin. Date: October 14, 2014 Location: Austin Country Club Topic: Gone Fishing: Selling the Work of a Lifetime Characteristics of a business sale including financial statement analysis, financing strategies, and business...
8. Ignoring the psychological aspects of negotiating Psychology is a big factor in negotiations between buyers and sellers. This is amplified when family businesses are involved because of the interplay between complex personal, family, and business relationships. The participants need to empathize with their counterparts to...
7. Focusing on price but not on terms M&A negotiations involve many variables that affect the ultimate value and satisfaction achieved by the parties to the deal. Of course the price is important to both sides, but the terms of the deal should also be seriously...
6. Losing momentum Most successful deals have a sense of momentum and mutual trust between the parties because they are excited to move forward and close the deal. Each step is a negotiation so it’s generally better to negotiate the key points (price, terms, etc.) earlier...
5. Ignoring the importance of post-merger integration Over half of M&A deals fail or don’t produce their planned results. The number one reason is poor integration planning and execution after the merger or acquisition. If you are buying another company, you want to hit the ground...