So now you have identified a business as a possible acquisition. The next step is to get information from the business that describes its operations, market, and financial condition. Your business intermediary can compile this information and then walk through it with you to help you better appreciate the pros and cons of the particular opportunity.
One critial fact that you will want to review with your business intermediary is the seller’s reason for selling. There are many reasons to sell a business, a few of which serve as warning flags to potential buyers. Your business intermediary can help you determine whether or not the seller’s motivation is a problem.
As for financials, numbers may not lie, but reports often do. Your business intermediary will walk through the prospect business’s financials with you to spot potential problems with the business. Ideally, you will have five years of financial reports available to help you best appreciate the true financial condition of the business.