Wednesday, April 25, 2012
- What makes you a good business owner can make you a bad deal person.
- Terms are often more important than price.
- Watch out for dependencies in the business. The first place to look is at the owner. How dependent is the business on him or her?
- Due diligence is for proving what you've been told (and on what based your offer); it is not time for surprises.
- Educate the seller on the process; make sure he or she understands the bank and you will be "nosy."
- You can't be a "defensive" buyer.
- The administrivia near closing will drive you nuts, but must be done.
- Make your financing benchmark 50% of profit (or more) to acquisition debt (a 2:1 debt coverage ratio).
- You will make a leap of faith. Do it right and that leap is off a chair not the roof.
- The only thing worse than no deal is a bad deal. Be patient and don't get "buyer fever."
About John Martinka
Over the last 15 years Mr. Martinka has written over 200 articles, authored a workbook, assisted on over 100 buy-sell transactions and spoken to thousands of people on the subjects of buying, selling or growing small to mid-sized businesses. Some of his related articles and speeches include:
• The Seven Deadly Sins of Business Buying
• Non-Financial Factors Influence a Company's Value
• How to Sell Your Business for What you Thought When Other People Can't
• Growth by Acquisition is the Fastest, Least Painful Way to Grow
• An ACTION? Plan to Sell Your Business
Mr. Martinka can be reached at 425-576-1814 or at
john@johnmartinka.com. Please follow him on his website at www.partneroncall.com/johnmartinka, his blog www.johnmartinka.com, and via Twitter at
http://twitter.com/johnmartinka He is available to speak to groups of business people and to write articles for all varieties of media.
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