Click here for a link to the full article by Judy Mason, Joseph Roznai and Henrik Wiberg MichaelSilver, published in Daily Herald on November 9, 2021.
Owning a business and being your own boss can be personally and financially rewarding. Taking a strategic approach to acquiring a business will increase the probability to success.
1) Finding a company to purchase
Set clear objectives and write an acquisition plan. Put together your "due diligence" team that will include an investment banker or business broker, financial adviser, accountant, attorney and lending sources.
2) Researching your target business
Determine why this business is for sale. Review and analyze the current record and operations: financial records, sales records, marketing strategies and advertising costs, contracts and legal documents.
3) Making an offer and negotiating the deal
Work with your professionals to determine the company's current value. Determine if the sale must include associated land or buildings used in the operation. Compare your valuation with the seller's asking price.
4) Arranging financing
Will the seller consider financing a portion of the purchase price -- i.e., taking a note for some of the purchase price? Alternatively, how much bank financing can you obtain for the sale, and how much money do you have to invest from your own funds? What additional funds might you need to fund the transition after your purchase?
5) Consider your exit plan before you buy
Owning a successful business means meeting your financial goals and being able to exit the business. When developing your acquisition plan, consider how best to exit.
Steve Niehaus, MBA, CBI, CM&AP
239.565.3171
