When pursuing a business purchase/acquisition, you want to push the costly and time-consuming tasks down the road, and shore up the major deal points as quickly as possible. As I have said for years, if the ship is going to sink, better now than later (after you’ve spent a lot of time and money). So here is how you should sequence the tasks of a business acquisition in a world where many deals fall apart.
People talk about multiples of revenue. Sure, one can take any price and divide it by the annual revenue of a business and obtain a revenue multiple. A $1 million sale price divided by $750,000 in annual revenue equals a 1.33 revenue multiple. Right? Nothing inherently right or wrong in talking about multiples of revenue.