What features do I look for in a private business?

A scoring system for private companies.

Valius have devised a scoring system which can be used to pre-select any business which is being considered for purchase. The points below are your guide to generate a score which can then be categorised into Red, Amber, Green depending on the score. Consider the following:

1. Length of time the business has been on the market ?
2. Will the existing owner(s) leave equity in on sale ?
3. Does it have consistent/increasing levels of ebitda ?
4. Are there any current management team members who can join with our buyer to effect a transaction to create a buyout team ?
5. Does any management team member have personal capital to invest as part of the deal ?
6. Is this a retirement sale ie is the owner of formal retirement age ie 55 or above ?
7. Is there a strong balance sheet ie over £500k net asset value ?
8. Are there substantial cash reserves on the balance sheet ie over £250k ?
9. Does the business have some defensible aspect to it eg registered patents, long term formal contracts, etc ?
10. Is the business in one of the following sectors: recruitment; haulage; building/construction; fit-out; contracting; property development ?
11. Level of most recently reported ebitda

The higher the score, the greater the chance of success and in particular, the greater the chance of a funder being interested in backing your purchase.