When buying a business there are a few key elements which can make or break the acquisition. If you missed Mandy’s top tips here, we’ve given you a short summary below.
So what are the keys to success?
Choose the right team for you
Firstly don’t underestimate the time it will take you to find the right business, at the right price and on the right terms. You’re probably running a successful business, or working full time, so you’ll need to make sure that you’ve got good advisors around you.
Don’t be afraid to ask them about their experience and any recent deals that they’ve done, it’s a very big investment for you and you want the comfort that you’ve chosen the right people.
Don’t get carried away
It’s really easy to be carried away as it’s an exciting part of the journey as a business owner. But, be strict with yourself and evaluate each business and every business impartially. It’s easy to convince yourself that there are synergies or cost savings later – synergies are like unicorns we know what one looks like but none of us have actually seen one!
Don’t be tempted to skimp on the due diligence, this is your once-only opportunity to explore in-depth the risks, pitfalls, opportunities of buying this business. You may uncover some nasty surprises that you’re better off knowing about before you’ve actually bought the business. It might still make sense to buy it, but not at the price you first agreed on, or it may be better to simply walk away.
You don’t want to put at risk the business you’ve already built up or give up a successful career if your gut says it doesn’t feel right. If it doesn’t feel right then it probably isn’t and you’ll be making a very good business decision.
This is absolutely critical and without one, you won’t make the changes you planned to. You’ll end up with two businesses running alongside each other, using different systems. If you identified staff savings it’s much harder to make those decisions further down the line when you’ve worked with these people for 6 months. You’ll start to justify keeping them on and before you know it, the deal doesn’t make sense anymore. It’s like living together after you’ve got married, the wedding day is the exciting stuff, but the happy ever after is where all of the hard work starts. Draw up a detailed timetable of what needs to be done and by who, act swiftly and stick to your plan.