Acquiring an already established company is the perfect way to become a business owner. Not only can you avoid all the difficulties involved in building a startup from scratch, but you can also ensure that the business is viable before investing your money. You can also start generating revenue right away, since everything from staffing to branding is already done through acquisition.
It’s not just budding entrepreneurs who benefit from acquiring a company. A business owner looking to expand may choose to acquire a rival to grow the business. This is a much faster way to grow than opening an entirely new facility.
Whatever your motivation for acquiring a company, you’ll find that many of the steps you need to take are the same. Acquiring a business can be a complex undertaking, so it’s important to be as well prepared as possible before signing the contract. A thorough process now will save you a lot of time and trouble later.
clarify your personal situation
Before considering acquiring a company, you may want to reconsider your own situation. This will allow you to properly filter your options.
Consider how much money you can spend on potential purchases. This will quickly narrow down your choices. After that, you need to think about how much revenue you need for your business. Some ventures may only yield small profits.
Decide on the sector you want to buy
For anyone looking to expand their existing business network, this is an easy question to answer. If your business is in a similar field to yours, it will be relatively easy to get acquired. Even better if you can buy a rival business. Not only can you grow your business in one fell swoop, but you can also remove your competitors from the equation.
On the other hand, those considering their first foray into business ownership will have some decisions to make. To determine what you’re looking for, you should consider the following factors:
A bad acquisition can have dire consequences.we will help you avoid it
As you can imagine, there are many factors to consider when acquiring another business. Our free consultation service alone can significantly reduce your chances of incurring hidden surprise expenses when acquiring a business.
For free, no-obligation advice, call our team today on 0800 975 0380 or book your free consultation.
experience
While it may be obvious to some, others may have some different ideas about the type of business they want to run. It goes without saying that it’s beneficial to have some experience in your chosen field, but you may find that you have transferable skills that work well in other industries. Those working in accounting or management roles may find their skills useful in a variety of areas.
Motivation for acquiring a company
Do you want to take over a business that feeds your passion for a particular subject, or do you just want to make as much money as possible? For example, if you love woodworking, even if your income is meager, You may also decide to purchase a local carpentry company.
If profit is the most important factor, you should also think about how much risk you are willing to take on. A low-risk business can be an attractive proposition, but it may not give you room to grow later on.
position
This is usually the easiest question to answer. Potential business owners may consider purchasing something closer to home. This is not surprising. That’s because a long commute can end up leaving you with less time to spend on your business once the initial excitement of running it wears off. There are plenty of activities even after purchase, so it’s convenient to have one nearby.
However, keep in mind that your local area may not be the best location for the type of business you’re considering. Unless your business is in a specialized area where people travel, you may need a high-traffic location. This is especially true in retail.
Internet-based businesses don’t have to worry too much about this. However, if you prefer office-based staff over remote workers, it’s worth considering the ease of access to their facilities.
Also note the amount of business competition in this region. Your company is more likely to attract customers’ habits when they have few other options. It is also recommended to identify neighboring businesses in nearby industries. A hardware store down the road from a successful builder’s yard is likely to find regular customs from neighbors.
Find the right company to buy from
Different businesses will find their operational practices to be very different, even if they all work within the same sector. At the same time, you will almost certainly find some that perform better than others. As you can imagine, those that generate greater returns often cost more to acquire, but this is not always the case.
The owner of a successful company who wants to sell quickly for personal reasons may value his business at a lower price than a stubborn seller of a struggling company. Don’t write off your business just because you think it’s too expensive. You might be surprised what you find.
Of course, there may be businesses for sale that aren’t particularly successful, but could grow rapidly with a few tweaks. That’s why it’s important to thoroughly check every detail about the company you’re interested in.
See business at work
This should be one of the first things you do when researching a company you’re interested in. If possible, try to visit the company as a customer before officially contacting the owner. This provides valuable insight into the company’s strengths and weaknesses. Ask a friend or family member to do the same and cross-reference the results to look for common concerns.
It’s also a good opportunity to see how your staff is doing. Employees will inevitably act differently in front of their bosses, but by interacting with them as customers, you can often see which staff members are an asset to your business. Be sure to listen to conversations between workers. Any dissatisfaction with the way your business operates can lead to good ideas for change.
Free yourself from the stress of acquiring a company
There are countless moving parts and laws to consider when acquiring a business. By addressing the issues, we simplify the process and allow you to focus on the bigger picture.
For free, no-obligation advice, call our team today on 0800 975 0380 or book your free consultation.
On the premises
Some companies rent their facilities, while others own them outright. This is a key consideration when selecting potential companies to acquire. If the company in question owns the property, selling the shares directly will automatically transfer the property to you. Naturally, this significantly increases the value of the company.
Including real estate in a transaction naturally requires interested buyers to perform additional checks. Real estate can be a great asset to any business, but it can also cause big problems.
If your building needs repairs, you need to make sure it’s not an issue that could cause serious problems for you as a manager. You should also check whether the company owns the freehold interest in the property or whether leasehold payments are required.
At this point, it’s a good idea to consider how expandable your facility is. If you need to relocate, are there practical solutions in the area? If you plan to add staff, will there be sufficient parking?
value business
Many companies already have list prices in place. However, in some cases you may choose to make an offer on a business that is not for sale and you will need to evaluate it yourself to determine its value.
There are many different ways to value a company, and choosing the right one can be a dizzying task. The easiest way to avoid this is to use a free service, such as our unique online evaluation tool, which automatically selects the most compatible method.
If you follow the steps above, you will find that getting the rest becomes much easier. Based on the information you have collected, you need to figure out how profitable the business is and how much you are prepared to spend on it.
Are you thinking of acquiring a company?
We have helped countless clients buy the best business for them. Acquiring a company can be a complex undertaking, but with our help, we can help you avoid common pitfalls and ensure your acquisition stands the best chance of success.
Call us on 0800 975 0380 or email us. [email protected] For a free consultation. There is no obligation to use our services and your calls and communications will be treated as completely confidential.