The first “filters” for your leads are the initial criteria that you set in your acquisition plan. Although you will have many more issues to review as information unfolds, it is unpractical to consider much more than the total sales revenues, degree of profitability, and industry, at the start, because this is all the information you are likely to get from most brokers or other sources before having to sign a confidentiality agreement.
Once you sign a confidentiality agreement, you are wise to set up more detailed criteria. Some of the more common criteria used at this next stage include the location, product line, the reputation of the company, if easily determined, growth patterns for the industry and the company up for sale, more detail about profitability, cash flow and liquidity, and of course, the overall appeal of the business to you, personally. Continue reading The Successful Business Acquisition Process – Step #7 – Narrowing Your Search: Matching Broad Criteria of Your Initial Acquisition Plan