experience. But the ability to take over a leadership should be paramount. Geography - Is the business close enough to where you live given the amount of time you will need to spend on-site? It is generally very difficult to provide leadership without significant ‘face time’ with customers and staff. Financials - Does the business look profitable? Is it growing? How much of the revenue is recurring/repeating? Are the financials up to date? Are there any anomalies on the balance sheet? Is the business capital intensive, do tangible assets need refreshing? How does seasonality affect things?...etc. However, it is important to be comfortable at a high level with whatever business you are looking at. We do not suggest asking for significant additional financial information until after you get to meet the Seller. You may decide you don't like the vibe of the business, so more financial information is pointless anyway. Also, you may find more detailed information is not forthcoming and often meeting the owner is a much quicker way to get them to release key information. Valuation - Is the business in the ballpark for what you think you can cash flow (see chapter on valuation). Can the business be grown to increase valuation? Management Team - Is there a good team that can run the business day to day? Although we talk about stepping in for the X-Factor leader, few business Buyer actually want (or need) to be responsible for the day-to-day delivery, this is more about leadership so having a team in place that can keep things operating normally is usually key. Motivated Seller - Is the Seller motivated? This is critical because if they are only half-hearted about selling the transaction is unlikely to complete as they will eject at the first difficult obstacle (see chapter 1 on why people sell).
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