Questions to Consider When Buying A Business
Questions To Ask When Buying A Business
If you want to buy a business, Decision Associates M & A suggests that your answers to the questions below will help identify the best match. The key to helping you determine a great fit is understanding your specific goals.
Type of business
- What type of business do you want to acquire?
- What do you want to stay away from?
- What is your overall acquisition strategy?
- What will this business do for you?
Scale of business
- What scale are you looking for in terms of overall purchase budget?
- What amount of annual sales do you want?
- What number of employees do you want?
Ownership of business
- Do you want to own 100 percent?
- Are you open to a strategic partnership or investors?
Products and services of the business
- Do you want to have proprietary products or services?
- Are you looking for more capacity of products you have now or product extensions of your existing products?
- Do you want new products of a type you don’t have now?
Location of the business
- Are you looking to reach new geographic regions (e.g., to reduce shipping costs or be near markets)?
- Is there a limit to how far away you want the new business to be?
- Are you looking to reach specific customers or types of customers (e.g., buying a company to get specific customers)?
- Do you have or are you building toward a specific holding or group of companies?
- Do you want a business that can run on its own...management team, facilities, markets, marketing, sales force? Or, do you want something that will use skills, facilities, marketing and more from your existing business?
- Do you need the current owner to stay? If so, how long?
- Do you have new leadership ready or would you need to find someone to run this for you?
- Are you looking for a business that is on the weak side in terms of business performance, but that can be bought for a bargain and built up with your acumen and team?
- Do you want something that has momentum and is in great shape to build upon?
- What are the strengths of your current business?
- What are your strengths and those of your existing team (or partners)? What challenges fit your skills?
- What are the types of businesses that you have done best?
- How close do you want to be to the business? Hands on or more of a chairman?
- What is your team’s intellectual property? What do they know and what holes can they plug in an acquired business?
- Who is doing your due diligence?
- How will you assess:
- Financials, performance and capex history?
- Markets, market diversity, market stability, market potential and competition?
- Sales and sales channels?
- Legal vulnerabilities, liabilities, warranty exposure and general legal history?
- Organization and people?
- Operations, equipment health, equipment suitability to market direction?
- Systems and technology and quality infrastructure?
- Overall facility condition, floors, layout, infrastructure, expansion capability?
- Environmental challenges?
For a deeper understanding of these questions, contact Decision Associates M & A.
- Preparing To Sell
- What Do Buyers Really Want?
- How To Increase The Price You Get
- Questions To Ask When Selling Your Business
- Timing The Sale Of Your Business
- Why Earnings Are Critical To The Sale Of Your Business
- Buying a Business
- Meeting With Your Bank To Finance An Acquisition
- Questions to Consider When Buying A Business
- Mergers & Acquisitions Whitepapers