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A buyer'sTop 5 mistakes
ver the years, we have seen business people hoping to buy a company make the same mistakes over and over again. Here is a list of some of the most common errors we've seen over the years.
Insufficient information verification. Important information about the business should be verified, in particular as it relates to trend lines. How have customer relationships developed? What structural changes have there been? Are there any supply constraints - now or predicted to occur in the future? How difficult is it to attract future talent? Is the company dependent on key employees? To save money, the principal can do some of the investigation, but this is not the place to cut corners, as it may cost a lot of money in the long run.
For example, prior to an acquisition, a CPA can review such key financial information as payables, receivables and inventory, an attorney can review leases and contracts, and a business...