With the new year fast approaching, you may be considering an acquisition. Ninety-five percent of all owners who buy or sell a company do so only once in their lifetimes. Most of us don’t go through the process enough times to get good at it! So before you take the leap, make sure you consider the following.
- Buying another company can be the easiest and fastest way to grow your company, but your company must be in first-rate shape, both financially and operationally, before you even entertain the thought of purchasing another. If your company is not in the finest form at the time of acquisition, your problems will only multiply, instead of diminishing, no matter how good the other company looks.
- You need to define goals for yourself and your company. Look at your personal and business goals: How will buying a company enhance your life and take you toward your goals and dreams?
- You will need to assemble a team of experts. You alone can’t possibly know all there is about the financial, legal and cultural elements in buying a company. Remember, you are the one who should ultimately be comfortable with the outcome of the deal.
- Understand that cultural issues have an enormous impact on your company. The numbers aren’t the only thing that should be solid—the culture of your company needs to be healthy in order for an acquisition to work. You need good soil to grow good crops.
- There are many questions you should be able to answer in getting ready for an acquisition and going through the process, but before you move ahead with anything, you must be able to answer The Big Question: Am I ready to take on this job for the next 4-6 months? Am I willing and able to be the in-charge person for the buy-out? Be realistic about the amount of involvement this will require of you, on top of everything else in your business.
The best deals are win-win-win: You and the other owner get what you need and want, and all the employees benefit from a strengthened company and increased opportunities to make more money and move forward in their careers. Remember, if you go through the process of preparing to purchase a company and decide not to go through with it, it’s no problem. You can’t lose by taking the steps to prepare for an acquisition—everything you do in the process will strengthen your company.