10 Things To Consider When Analysing A Company Acquisition
1- How many years have they been on the market? I look for established companies with at least 5 years on the market.
2- Why are they selling? Understanding their Why is a very important factor.
3- What is the business model and pricing?
4- Growth opportunity: How can I add value?
5- What are the key assets? Like: Brand, Customers, Website, Social media accounts, Softwares, Equipment, machinery.
6- Seller financing available? As I use other people's capital + seller financing to purchase companies, it's important to ask.
7- Do they have a data room in place? After signing a NDA, I would request the latest 3 Balance Sheets, Profit & Loss and Tax Returns.
8- TTM Gross Revenue & TTM Profit: Trailing twelve months (TTM) is a measurement of a company's financial performance over a 12 month period (income and expenses) I regularly check this.
9- Adjusted EBITDA: What's the operating profit of this business after paying a fair CEOs salary?
10- SDE: How much money would I be able to put in my pocket?
Hope this helps you to analyse better your next acquisition !
Regards,
SHEHZAD QURESHI
ENTREPRENEUR AND GROUP CEO
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