Consulting for Business Buyers
For a first time business buyer, acquiring a business is a very big step. Even if you're a veteran buyer, an acquisition is a major investment that requires proper research, evaluation, and due diligence. No two business acquisitions are alike and all of them have their complexities and potential pitfalls. There is no well regulated business acquisitions marketplace out there. It's pretty much a buyer beware environment.
We have been through the business buy/sell process hundreds of times. We can draw on our experience and expertise to help you make the right decisions from the initial planning through the closing and integration of your acquisition.
Note: Please also take a look at acquisition search services, our services primarily for companies looking to grow by acquisitions.
Here are some of the ways we can help:
Finding Acquisition Targets
Ironically, most businesses sold each year are never officially on the market, nor are they advertised as being for sale. In fact, asked if their company might be for sale, even most owners of businesses that are in the process of being sold, would answer "no" right up until the closing. Once a good business is put on the market and advertised for sale, even obtaining information about it becomes a challenge. Intermediaries do their job to screen prospective buyers and protect proprietary information in service to their client, the seller.
Finding a good business to acquire is well over half the battle. While most businesses are not officially for sale, some business owner would consider selling if they were approached in the right way. We specialize in finding what we call those gray area sellers--the business owners who are not actively marketing their companies, but would consider a proper invitation to discuss the possibility of selling their companies. We recently wrote a book on the topic of business acquisitions. That book, titled Strategic Acquisitions: A Smarter Way to Grow a Small or Medium Size Company includes a section on buying companies owned by these gray area sellers. An excerpt from that section of the book is available here.
Business Valuation: Are You Paying a Fair Price?
We can help estimate the appropriate value for the acquisition that you are considering. Frankly, lots of companies can perform a competent business valuation. But we can go beyond the financials to look at other aspects of the business that no study of the financial statements or tax returns will reveal. For example, we also evaluate:
- Dangers or opportunities that may be on the horizon
- Customer profile issues that could present problems
- Competitive issues
- Whether the business is the right fit for you or for your existing company
- How easy or difficult it would be for the business to transition to new ownership
- Other characteristics of the target company that just aren't revealed by the financials statements
These are just a few of the questions we can look into for you to help mitigate the risk of acquiring a going company.
As many year's as we've been buying and selling companies, we can't recall even one that didn't involve a lot of back and forth negotiations. Of course these negotiations often involve price. But they can involve much more than price, such as:
- Retention of the current owner for a period of time
- Employee issues
- Formalized introductions to existing customers
- The flow of information needed to make the go/no-go decision
- Deal structure
- Allocation of the sale price
- Lease issues
- Post sale issues (ex: existing credits or gift certificates, work in process, contracts in review, etc.)
- Payment terms (owner financing, escrow, etc.)
- And more...
As seasoned business intermediaries, we know how to bridge a lot of gaps between buyer and seller. We know how to predict the invariable obstacles and sticking points, and how to get past them.
If you're prepared to make your acquisition with cash, you don't need any help in obtaining financing. However, most acquisitions do involve some degree of financing.
We have banking and other lender and investor relationships and we know how lenders evaluate business acquisitions. We can help you get the financing you need at the best terms possible.
Acquisition Due Diligence
It is a buyer's responsibility to verify the truth and accuracy of all the information presented to him or her. Due diligence must be done thoroughly, carefully, and economically.
We can help assure that you are buying what you think you are buying and that there will be no unwelcome surprises after the close.
If you're seriously considering a business acquisition, let us help protect you and help you through the tortuous process. For a no cost and no pressure initial consultation, fill out this form, or call us.