Finding a business to acquire
Making the decision to acquire a small business is one that requires much forethought and planning. In some cases, buyers are confident in their desire to buy a business, but are unsure of what type of company will be the most lucrative and well-suited to their needs. Darren Dahl of Inc. provides the following advice on choosing the right business, and what committed buyers should do before making an offer.
- Know your budget. Down payments vary depending on the type of loan you take out to make the acquisition. Having a clear idea of what you can realistically afford will narrow down your search for a viable business to acquire.
- Take an inventory of your skills and identify which ones you want to use in running your newly acquired business. Additionally, consider what skills you might need to gain before you buy a business (e.g. professional licensure), and decide whether you want to fly solo or run the business as part of a team.
- Make sure you have a thorough understanding of how owning a business that is new to you will impact your life, including how far the company is located from your home, how many hours you will need to work during and after the transition and whether your spouse or partner is on board with the commitment.
- Ask the current owner questions to find out why they want to hand the business off to a buyer, how the company his been performing throughout various economic fluctuations and what their take-home salary is. Finding out whether the seller would be willing to consult you in your role as the new owner might also be of concern.
Developing an acquisition strategy is a complex process that involves many different considerations. M&A advisory services can help you narrow down your options and make an offer on a business that meets your criteria.