Exam 3: Finding Opportunity in an Existing Business

Friends and family are not viable sources for leads on existing businesses that might be for sale.

Liquidation value is a determination of the net cash that could be obtained through disposing of assets via a quick sale, with liabilities either paid off or negotiated away.

Becoming a successful entrepreneur is a process that can be simplified and accelerated by purchasing an operating business.

Nonfinancial variables to consider in valuation include ________.

Two primary risks start-ups face are ________.

How would you execute due diligence? What areas could you do yourself? In what areas would you need help, and who would you recruit to assist you?

Decision-making criteria and priorities when searching for an existing business include ________.

Discovery of potential problems when buying a business is the responsibility of the ________.

Due diligence can be defined as ________.

Discuss some of the potential pitfalls of buying an existing business that might be detrimental to your business idea.

Examples of poor fit include ________.

Which of the following may not be an undisclosed issue when buying a business?

Buying a successful business can help an entrepreneur in all of the following ways except ________.

A legal document enumerating the type of information that is to remain confidential is called a ________.

What method(s) of valuation would you use? Why?

Employees are not a particularly valuable part of an acquisition.

Although buying a business has many advantages that may translate into market benefits, you will also take over its challenges and problems.

________ is/are a source for leads regarding businesses for sale.

Cash flow valuation uses projected future cash flows and the ________ to arrive at a figure.

Sellers may be hesitant to disclose too much information to potential buyers.