August 27, 2015

Ms. Schuback’s apples

In the city of Jork in Germany Ulrike Schuback is showing around to Charlotte Parnack, the reporter from Die Zeit newspaper, her fields of apple trees and is explaining about the situation she is facing: this year she won’t pick the apples and will be waiting for them to fall to the ground.

As a result of the economic embargo imposed on Russia, this year she cannot deliver her only customer in Russia similar to many farmers all over Germany. Ulrike Schuback is holding Russia responsible for this situation, which is not within the sphere of her control.

One of the questions that we ask businesspeople, who want to sell their business, is: is their company dependent on any of their clients? In other words, what would be the magnitude of the problem if a client stops his/her orders next day?

The answer to this question in case of Ulrike Schuback is very clear. She cannot sell her produce to her sole customer this year. However, her current situation could have been very different if she had been selling her apples to customers in four or five different countries, even if such an operation would have been more difficult and generating a lower profit margin.

While potential acquirers consider the future of a company, they also give importance to the range of clients that the company has. For a company with only one client it is not easy to find a potential acquirer – other than one who absolutely needs to reach that client and buying the company is the only way to achieve this aim.

To read the article on Ulrike Schuback: Zu viel des Guten

The oldie of the week: Elton John and Kiki Dee – Don’t Go Breaking My Heart (1976)

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