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Getting Ready to Make Your First Acquisition

Ready To Take The Plunge?

Ready To Take The Plunge?

 

As a business owner you can take a big step forward by buying another company to bolt onto your own.  Buying a business is the quickest way to grow.  A well thought through acquisition will immediately boost your sales and profits.  But beware – a botched deal can destroy shareholder value, and drain management time for years.

So how do you avoid the mistakes and set about finding the kind of acquisition that will drive you forward?

The first part of the answer is good preparation.  Get clear in your mind the kind of company that will really add value to your own.  How big must it be?  What products or services are compatible with your own?  What type of customers should it have?  How much profit must it be making?  By asking these questions you can create a strict set of criteria against which to check opportunities.

Don’t just rely on the opportunities you stumble across or come to your attention.  Research the companies in the target market and create a shortlist to approach.  If an opportunity doesn’t fit the criteria you have set, discard it!

Get professional advice on formulating a bid price and structuring the finance and payment terms.  Too many acquisitions are an up hill struggle because the buyers overpaid at the start.

Reduce the risks by using an adviser with hands-on experience of buying private companies to help you through each stage of the process.  They will help you set a fair price for the target company, and set up the best finance and deal structure.  The right adviser might even help you find the right target and make the first contacts.

 

If you are interested in finding out more about these and other issues relating to the acquisition of a company one of our business sale experts would be delighted to talk to you in complete confidentiality. Click CONTACT ME to book an initial phone conversation or call us on 01604 432964.

 
We welcome comments on posts, and questions from our readers. Use the “Leave a Reply” box below. We answer all reader questions within 24hrs. If you would like to be informed about new posts on the theme of selling a private company click the “Subscribe” button at the right hand side of this page.

Ready to take the plunge?

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