{"id":561932,"date":"2023-06-07T14:30:13","date_gmt":"2023-06-07T18:30:13","guid":{"rendered":"https:\/\/vrbbd.wpengine.com\/vrbbgreenbay\/what-serious-buyers-look-for\/"},"modified":"2023-06-07T14:30:13","modified_gmt":"2023-06-07T18:30:13","slug":"what-serious-buyers-look-for","status":"publish","type":"post","link":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/what-serious-buyers-look-for\/","title":{"rendered":"What Serious Buyers Look For"},"content":{"rendered":"
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Obviously, serious buyers want to carefully look at the financials of a company under consideration and all of the other major aspects of the company. However, there are a few other areas that the serious buyer will investigate that sellers may overlook.<\/p>\n

The Industry<\/strong> \u2013 The buyer will want to take a serious look at the industry itself, the customers, the suppliers, the competition, etc. This investigation will cover the strengths, weaknesses, threats from competition, and opportunities of the potential acquisition. With the growth of the \u201cbig box\u201d retailers, much power has shifted from the manufacturer to the retailer. A manufacturer may want to increase prices, but if Wal-Mart says no, it\u2019s a very powerful no.<\/p>\n

Discretionary Costs<\/strong> \u2013 Some sellers will reduce their expenses in discretionary areas such as advertising, public relations, research and development, thus making for a higher bottom line. However, these cuts will hurt the future bottom line, and smart buyers will take notice of this.<\/p>\n

Obsolete Inventory<\/strong> \u2013 This is another area that buyers take a serious look at and that can impact the purchase price. No one wants to pay for inventory that is unusable, antiquated or unsalable.<\/p>\n

Wages and Salaries<\/strong> \u2013 A company may be paying minimum wages, or offering few or low-cost benefits, a limited retirement program, etc. These cost-saving devices will make the bottom line look good, but employee turnover may create expensive problems later on. If the target company is to be absorbed by another, compensation issues could be critical.<\/p>\n

Capital Expenditures<\/strong> \u2013 The serious buyer will take a very close look at machinery and equipment to make sure they are up to date and on par with, or superior to, that of the competition. Replacing outdated equipment can modify projections and may affect an offering price.<\/p>\n

Cash Flow<\/strong> \u2013 Serious buyers will take a long look at the cash flow statements and the areas that affect them. The buyer wants to know that the business will continue to generate positive cash flow after the acquisition (i.e.: after servicing the debt and after paying a reasonable salary to the owner or general manager).<\/p>\n

Other areas that sellers overlook, but that the serious buyer does not are: internal controls\/systems, financial agreements with lenders, governmental controls, anti-trust issues, legal matters and environmental concerns.<\/p>\n

Copyright: Business Brokerage Press, Inc.<\/a><\/p>\n

everest comunity\/BigStock.com<\/a><\/p>\n

The post What Serious Buyers Look For<\/a> appeared first on Deal Studio – Automate, accelerate and elevate your deal making<\/a>.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Obviously, serious buyers want to carefully look at the financials of a company under consideration and all of the other major aspects of the company. However, there are a few other areas that the serious buyer will investigate that sellers may overlook. The Industry \u2013 The buyer will want to take a serious look at […]<\/p>\n","protected":false},"author":2,"featured_media":561933,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[],"class_list":["post-561932","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-seller-articles"],"blocksy_meta":[],"_links":{"self":[{"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/posts\/561932","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/comments?post=561932"}],"version-history":[{"count":0,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/posts\/561932\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/media\/561933"}],"wp:attachment":[{"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/media?parent=561932"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/categories?post=561932"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vrbusinessbrokers.com\/vrbbgreenbay\/wp-json\/wp\/v2\/tags?post=561932"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}