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Evaluate a fictional distributor acquisition from thesis to diligence and handover. Practice spotting which claims need documents and which cash needs remain after closing.
Four guided lessons, hands-on decision sequences, practice checks, and final decisions. Build a plan, test it, then examine the reasoning. Progress stays on this device only.
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After this lesson: Set fit criteria before looking at asking prices.
Buying a company can provide an operating base, but a good story is not a strategy. Define the customer, geography, your capabilities, seller dependence, budget, and required working capital. Reject deals outside the criteria before sunk costs drive the decision.
A veteran operator seeks a local distributor with recurring retail orders and documented routes. A listing with strong sales but an expiring exclusive supplier contract fails a key criterion until renewal risk is understood.
Use the briefing above. Select the actions in the order you would take them, then run the sequence.
Apply it: Choose a target based on fit rather than seller enthusiasm.
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After this lesson: Flag deal structure questions before assuming what transfers.
A buyer may purchase selected assets or ownership interests; liabilities, contracts, tax consequences, employees, licenses, and consents differ by structure and jurisdiction. Do not assume an asset deal eliminates all exposure or that customer contracts transfer automatically.
The proposed deal includes vans and inventory. One major retailer contract requires consent before assignment. The buyer lists that consent and inventory condition as closing questions for counsel.
Use the briefing above. Select the actions in the order you would take them, then run the sequence.
Apply it: Spot a contract that could interrupt revenue after closing.
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After this lesson: Reconcile claimed earnings to source records and cash needs.
Ask for tax returns, statements, bank deposits, invoices, inventory and aging, payroll, and customer concentration. Reconcile periods and investigate adjustments. An asking price multiple is not proof of cash flow. Accountants and counsel should review material discrepancies.
The seller says annual revenue is $1.2m. Bank deposits and sales ledger support only $1.05m before documented timing differences. The buyer asks for a reconciliation and does not price the unexplained $150k as earned revenue.
Use the briefing above. Select the actions in the order you would take them, then run the sequence.
Apply it: Choose the next document request when reported revenue does not match deposits.
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After this lesson: Budget transition cash and continuity tasks.
Closing is a handoff, not a revenue guarantee. Model payroll, inventory replenishment, receivables timing, seller transition support, key staff retention, and customer introductions. Check the low cash point with a downside case.
Purchase financing covers the price, but a retailer pays 60 days later. The buyer models two payroll cycles and a $35k restock before that receipt; the operating reserve must address that gap.
Use the briefing above. Select the actions in the order you would take them, then run the sequence.
Apply it: Prevent a profitable acquisition from running out of operating cash.
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Three new scenarios check what you retained. A missed answer opens a worked explanation and a reworded question.
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Original Aim High Hero explanations and fictional exercises. The external source provides subject reference and does not endorse this course.
U.S. Small Business Administration — Plan your business: buy an existing business ↗Investopedia — Acquisition overview ↗ExitBig — Business acquisition guide ↗Permanent Equity — First smaller company ↗Davis Business Law — Practical guide ↗Entrepreneur — Five acquisition considerations ↗eCapital — Acquisition glossary ↗