give a Buyer great comfort that the business can be understood and scaled beyond certain people. Also, in some cases, the operations manual can be used to 'franchise' the business to other locations. This is a somewhat specialised area and we would normally suggest engaging a business consultant who can assist with this. Vendor Concentration and Dependency - Some businesses are dependent on one or two vendors for the majority of what they make or sell. Should one of these relationships suddenly decide not to do business with them, it could have a detrimental impact on the company and cash flow. So a Buyer will want to assess this risk as well as the viability of replacement. This can also arise in licensing situations like a franchise where the franchisor would cut off certain territories or products on short notice or even refuse to approve the sale full stop. Risk can also arise where most of the revenue is from one or two suppliers who will continue to supply but there is a risk the product lines they supply will no longer be in demand in the future (i.e. fall out of fashion). In these cases, the ability and method to add new product lines must be assessed. Often this is a task done by the Seller historically so a Buyer needs to assess if they can learn the skills and build the contact networks necessary to keep a flow of new products being added.
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