Following our last newsletter when we looked at why now was such a great time to consider an Acquisition, this month we review our top 10 Deal Breakers, or things which have derailed deals.
As Virtual or part time Finance Directors we are passionate to help make deals happen, which is why it is incredibly frustrating when deals fall down. Our top 10 Deal Breakers highlights certain key areas for Business Owners to focus on.
So here are our top 10 Deal Breakers:
- The Buyer fails to secure the required funding.
- The Business Owner fails to continue to invest in the business once outline terms agreed.
- The target business has too concentrated a customer base.
- The business for sale has poor financial records and Management Accounts.
- Buyer Due Diligence reveals a key issue.
- Over reliance on a key stakeholder.
- The departure of a key manager in the target business.
- The wrong choice of lawyer to do the deal.
- Deal distraction ie. the Seller concentrates so much on the Deal that the business misses its forecasted profit.
- Lack of compromise by either the Seller or the Buyer.
The End Result
As Virtual Finance Directors we often are asked to do a Strategic Exit Review, where we review all the aspects of a business from the viewpoint of a potential Buyer. With our Deal experience, this means that Business Owners have a great opportunity to make changes to improve their business value.
If you would like to discuss any matter raised in this newsletter then please do contact us.