Buying A Business?
So, ...you want to buy a business?
You can't afford to make the wrong choice
Buying a business can be an emotional experience.The stakes are high. The prospects are enticing and the promise can seem unlimited; especially when reading some Agents descriptions of the business they are offering for sale.
It's important at these times to maintain a detached and professional position.
It may be your childrens inheritance which you are about to invest, and that is even more of a reason to remain sober, distant and calmly unattached when considering the options open to you.
You need a clear head with in-depth knowledge of the business sector you are looking at if you are not to commit some unavoidable mistake or other. But you also need to maintain a clearly focused, and realistic, appreciation of your own circumstances and those of your target to get the best deal possible.
It is at these times that we believe you need a 'second pair of eyes' to work with you. You require the services of a trusted and professional adviser. Someone who can bring objectivity to what can become a very personal challenge.
The context of your own position will largely dictate the most appropriate first steps to be taken along the acquiisition path.
You may already be 'on the inside' as an individual manager or, perhaps more likely, as one of a management team. In which case you are probably familiar with the terms 'Management Buy-in' or 'Management Buy-out'. You may then be very familiar with the processes of the business, ...but, if this is your first individual business purchase then it is probably fraught with dangers which you may never have experienced before.
Alternatively, you may be an outsider wanting to buy a 'new-to-you' business. A business trading in an area you only have scant knowledge of.
In this circumstance it is imnperative that you have someone who knows the industry standing at your side.
Either way, as we have stated it is your own situation which should shape your approach.
We suggest that you also consider the following points before you commence your journey:
* If the acquisition is for expansion, is this purchase the most appropriate strategy for you.
* What issues of 'best fit' will you encounter with the business you are buying.
* Can it be integrated smoothly and cost-effectively into an existing operation?
* Does preservation of employee rights, and continuity of service for later redundancy apply?
* Are there contracts in place for service provisions (either pro or con the business being considered); ... and can they be effectively novated?
In short... will two and two really make five? ...or could they add up to three if, for example, customers defect after a change of management, or you find that the Contracts you have paid good money for are next to worthless?
You are about to enter into a High-stakes Game...
...you simply must make sure you have the decks stacked in your favour.