Do you understand what is being sold?
Discover why it is so crucial to understand exactly what parts of the business are being sold and by whom in this short video from Jonathan Jay.
Jonathan explains why:
- You need to know whether you’re buying the assets or the shares of the business
- It is so difficult to extract value when the business is owned by a sole trader
- Due diligence is so crucial since sellers can be overly-optimistic about the business
Prefer to read this? Here’s the transcript:
Hi this is Jonathan Jay from The Dealmaker’s Academy.
This tip today is all about understanding what is being sold.
So are you going to be sold the shares company, do you want to buy the shares, are you going to be sold the assets, is it a sole trader in which case it’s far harder to extract the assets from a sole trader because a person, an individual owns those assets, owns the business.
So you got to understand what is being sold and sometimes sellers don’t tell you the whole story and they present everything to you and then you discover the natural fact, the business is split across several companies and they’re selling you the least desirable one, where actually you want the most desirable one or they’re selling off the bad bit of the business and they want to keep the good bit.
So big, big tip here, you need to find out what’s being sold, who you’re buying from and then you could have a more successful acquisition.
For the next tip, hit the subscribe button, I’ll see you next time.