Question

Entrepreneurship and Effective Small Business Management (11th Edition)

What's the Deal (pg. 231)

Do you notice any red flags or potential sticking points in either of these deals? Explain.

Relevant pages: https://www.chegg.com/homework-help/Entrepreneurship-and-Effective-Small-Business-Management-11th-edition-chapter-7-problem-2EIA-solution-9780133506327

Answer 1

Regarding the deal related to dividend.com, there are few sticky points. The first issue is dividend.com and hotstove.com, both are internet based and use the subscription. It means that the database of premium subscription holders and other newsletter subscribers can be used the business development of hotstove.com. It is not ethical or correct if a business is being sold with its database of all types. The second sticky point is the quality of the content of the website dividend.com that can be diluted just before the sale is completed.

Regarding the deal related to the Corbin Specific, the first sticky point is the declining sales of the business and the inherent reasons that are not being addressed by the owner. It will make suspicion about the financials of the business and it is a matter of study before making a sound judgment and valuation. The second sticky point is the relevance of the patents and copyrights in terms of life and changing trends and preferences among the target audience. Besides, the showroom business and its profitability is a matter of concern. When businesses are going online, there is no point to acquire a showroom. So, it is also a sticky point.