Below are 39 questions that stymie buyers of small and midsize businesses (and their advisors).
How do we know that?
We surveyed 10,000 people in the USA and Canada. And then many of them registered for our TeleSeminar.
Who? Business buyers, of course. And accountants, acquisition advisors, asset-based lenders, attorneys, bankers, business appraisers, business brokers, business development experts, college professors, companies wanting to expand via M&A, consultants, exit planners, family offices, HR managers, investment bankers, franchisors and franchisees, other sources of financing, private equity investors, private placement advisors, private wealth counselors, real estate agents, SBA reps, SCORE advisors.
This information is for professionals and for people who want to know what professionals know.
Praise about Ted Leverette’s answers:
Contributing to the success of my TeleSeminar were Donald Rudnik, who arranges hard money loans, and Clinton Lee, in London, an advisor on company disposals, mergers and other business exits. They publicized the event and invited people in their networks to dial into the TeleSeminar.
Well done. I enjoyed your call immensely.
— Nancy Fallon-Houle, Business, Corporate & Securities Lawyer
I really like the idea of the catch-all question. I call it the “Columbo question”. Thanks, you covered a lot of ground in a short amount of time. Looking forward to the next conference call.
— Tom Kastner, president of GP Ventures
I enjoyed the TeleSeminar that you put on. Having the questions that you would be answering ahead of time was very helpful. I was able to follow along easily as you went from question to question. I purchased both of your books just prior to listening to the seminar. I did learn it is about your approach most of the time when buying these businesses so I’m ready to go out looking now.
— Nathan Edelen, Director of Business Acquisitions
— Don Rudnik, Sterling Commercial Credit
I enjoyed your conference call today and need help buying a profitable business and execute on our merger and acquisition strategy! When is a good time to speak on the phone?
— J. Compton
The information was VERY informative and, as a Business Broker, was helpful to learn how a buyer should approach a business acquisition. Also, since I’m always looking for a business to buy, it was good to learn about the pitfalls to avoid.
— Rick Kunze, Murphy Business
I enjoyed your conference call. The information was quite valuable.
— Douglas Baumwall, Licensed Business Intermediary
Very to the point and straight answers.
— VP Chadha
— Gregg Fightmaster, Business Seller
How to Buy the Right Business the Right Way—
Dos, Don’ts & Profit Strategies
39 Questions From Business Buyers & Their Advisors
Some of these questions are controversial.
Business buyers and their advisors must know the correct answers for buying the right businesses the right way.
- What is the best way to identify or seek out business owners who are interested in selling but don’t have their business listed or advertised? [This is the most commonly asked question.]
- What is the most important question buyers fail to ask sellers?
- How to protect the buyer from seller omissions that do not have a direct financial impact, but effect operational management of the business (business not as described)?
- How to avoid customer attrition and price compression pressures that are a potential as a new owner?
- The broker wants me to complete a personal financial statement before meeting with the owner and negotiating a purchase. I understand their need to qualify prospective buyers but how much information should I provide at this stage?
- What is the portion of the purchase price that usually is the buyer’s down payment from the buyer’s own funds?
- What should I expect with seller financing?
- What about franchise resales I see online?
- Is it smart to pay cash for a business?
- Can I strike a deal without all of the financing lined up?
- What about non-bank and non-SBA financing for business acquisitions (i.e., creative)?
- How can I find businesses for sale with assumable loans?
- Is it possible to leverage financing to purchase an ongoing business showing verified profits?
- How can I present a more favorable financial capability to purchase a company?
- What kinds and sizes of businesses for sale should most buyers avoid?
- Can I get a better deal and make more money by purchasing a troubled company, which I will turn around?
- How can I find motivated sellers?
- Is it feasible to grow small and midsize businesses via mergers or acquisitions?
- What if I trust the seller and broker: Why is due diligence necessary?
- How do you decide what is truly necessary to find out in due diligence to mitigate risk and what is just curiosity to prepare for running the business?
- What are the pros and cons for buyers talking to business brokers about their listings?
- How can I find more off-market deals in my area?
- How can I cut through the “valuation” nonsense from brokers and sellers?
- What should I know about valuing goodwill?
- What is the most effective way of finding sellers with annual revenue between $500,000 and $5,000,000, which are financially distressed but not in bankruptcy proceedings?
- What alternative is there to the offer to purchase contract that brokers want me to sign before I can evaluate businesses?
- What should I watch out for in purchase contracts?
- What should I know about dealmaking during uncertain times, such as another recession?
- Why is it so hard to get to by-owner sellers on the “hidden market”?
- Why don’t most brokers and sellers follow up with me? (I have money and management experience!)
- What should be my first comment(s) or question(s) during my initial interview of a business seller?
- What kinds and sizes of businesses for sale should most buyers avoid?
- What are the best kinds of absentee-owned businesses?
- What is your “Street-Smart 22-Step Acquisition Sequence”?
- Do you think it’s true that a business seller really needs an industry expert in a business broker, to find a successful buyer for the seller?
- What should I be selling, existing businesses or new franchises? What do buyers really want?
- Should I be suspicious of this phrase: “Seller’s Discretionary Earnings”?
- Is an SBA loan still the best routine? How much liquid capital must I “show” and what credit score, should I am for?
- How can I buy the right business the right way?
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Our Business Buyer Advocates have helped clients evaluate and close buy/sell transactions with prices up to $20 million. Our sweet spot are deals ranging from one to three million dollars in sale/purchase price. (Probably because the quantity deals in that range is many times more than bigger transactions.) Check out our credentials and what is said about us by our clients and by various kinds of professional advisors.
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Want to know more? Read Ted Leverette’s newest book:
How to Buy the Right Business the Right Way—Dos, Don’ts & Profit Strategies
93 Profit Strategies
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