Issues that Reduce the Value of a Business

 

We have written in previous posts about the characteristics of a valuable company, but what are the things that reduce the value of your company?   We have yet to be offered a perfect company to sell, but some things stand out as issues that buyers really hate:

• One or two customers making up a large proportion of sales or gross margin;
• Year to year swings in sales and profits;
• Past problems with tax authorities;
• Unresolved employment grievances;
• Overdue trade debtors or a history of bad debt;
• Obsolete and slow moving inventory still included in the value of stock;
• Over reliance on the owner and a scarcity of talent at the next level;
• The potential for expensive dilapidations at the end of a lease.

Any of these issues can impact the selling price or the structure of payments in a negative way.  They might even make a smaller company unsaleable.

 

If you are interested in finding out more about these and other issues relating to the sale of a private company one of our business sale experts would be delighted to talk to you in complete confidentiality. Click CONTACT ME to book an initial phone conversation or call us on 01604 432964.

 
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