Buying a business or making an acquisition to expand your own business is both a rewarding and risky endeavor. It requires a lot of preparation, due diligence and professional help. Here are some tips you need to keep in mind if you are considering buying a business.
- Get the help of a professional. We highly recommend that you get the help of professional legal advisors, accountants and other consultants to help you thoroughly review and examine the legal, financial and business records of a business you want to acquire. You may want to save some money and do the review yourself, but know that you may be more at risk of incurring higher costs if you miss anything.
- Ensure that the prospective business fits with your plans and goals. Don't jump on the first opportunity of buying a business. Take time to evaluate the prospective business and see if it is something that aligns with your strategic plan and goals.
- Audit the business culture of the prospective business. Make a comprehensive evaluation of the culture of your prospective business to ensure that it fits in with your goals and values. If there are major gaps, you may want to reconsider and find another business that is more aligned to your current business culture.
- Establish a good relationship with your bank or financing partner. Get them involved early in the process. In this way, your bank or financing partner will be able to let you know how much you can borrow when you go into negotiations.
- Be prepared for what comes next. Make sure you have a plan in place after you acquire the business and communicate it to your stakeholders.
