Sometimes growing a business means acquiring another established business that provides a similar service or product to your offerings. Acquisitions take a lot of planning and usually come with significant upfront costs. However, the high price tag can be worth it in the long run, when a successful acquisition leads to greater profits and market share.
Acquiring a business
Expand your horizons
Steps to think through:
Prepare ahead of time
Be proactive in searching for a business. Get the word out by casting a wide net – talk to your lawyer, accountant, banking and business associates. Even your competitors can be helpful.
Acquisitions can take anywhere from six months to a few years, so make sure you’re in a position where you can afford the time as well as the financial cost.
Contact the seller directly to begin fostering trust and building a relationship.
Initial and pre-sale negotiations
Before entering into negotiations, do as much research as you can on the company to close the information gap.
Understand your financing options. Talk to one of our Business Advisors about your plans and determine what’s right for you.
Once the deal is closed, the real work begins. How you integrate the new business into your existing one can be make or break.
Integration takes time and money and surprises often come up.
Build flexibility into your plan.
Do your due diligence and look at:
Company’s balance sheet and historical and projected earnings.
The management team in place.
The importance of the current owner to the business and his or her willingness to stay to help with the transition.
The company’s operations.
The sustainability of the company and its profits.
How can Conexus help?
Our business advisors are happy to help you start planning for a business acquisition. There are several things to think about and we’ll work through them all with you. We can also help you by:
Understanding your business goals and growth vision
Updating or completing your business plan
We can also identify the right products to set you up for success when acquiring another business, including term loans or lines of credit.