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By John Carvalho
Hey Legends!
Let me share this great content with you!
When completing an acquisition, it is important to distinguish between these two concepts.
Great dealmakers continuously evaluate what's possible vs. probable through out the acquisition process
Possibility refers to the capability of an event taking place.
Probability refers to the likelihood of that event happening.
Let me provide some examples where it is critical to evaluate the difference between the two....
1 - When initially looking at a transaction, valuation and deal structures will filter opportunities into a 'possible' bucket
BUT softer issues, such as motivation of the seller, ability to fund the transaction, etc. will affect the probabilities of closing the deal
2 - When performing due diligence, lots of possible obstacles will be uncovered...loss of customers, potential litigation, etc.
The probability of these occurring and the impact to the business will provide guidance on weather to close the deal or move on.
Many novice dealmakers are enticed by the possibilities of acquisition targets at the onset...
And discouraged by the possibilities of risks through the due diligence process.
I believe the ability to assess probabilities (along with the possibilities) is a critical skill to becoming a great serial acquirer.
I would love to hear your thoughts!
See ya in the inbox!
Sebastian Amieva
Mergers and Acquisitions Expert
PS. If you want to Get The Ultimate Guide To Increase The Value Of Your Business Before Selling - Get it Here Sebastian Amieva
PS If you want to get personally mentored by myself and start acquiring a 500k-5MM businesses in 2022 contact me HERE