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Frequently Asked Questions
How do buyers assess whether a business is worth its asking price?
Buyers run pre-diligence to verify the seller's claims before committing to full diligence. They look at financials (revenue trends, EBITDA margins), customer concentration, owner dependency, competitive position, and any red flags in litigation or regulatory records. Well-prepared sellers with clean financials and documented systems command higher multiples.
What is the most common reason a business sale falls apart?
The most common deal-killers are surprises discovered in due diligence: undisclosed litigation, customer concentration higher than represented, owner-dependent revenue that won't transfer, and recast financials that don't hold up to scrutiny. Pre-diligence by the buyer — and pre-sale preparation by the seller — dramatically reduces this risk.
How long should you prepare before selling a business?
Best-in-class sellers start preparing 24-36 months before their target close date. This timeline allows for 2-3 years of clean, auditable financial records, time to reduce customer concentration, documentation of key processes, and gradual reduction of owner dependency — all factors that directly increase valuation multiples.
