Buying a business can be an enormous undertaking as well as a fantastic opportunity. You will be faced with matters both predictable and uncertain and your vigilance in exploring the opportunity will make the difference between success and failure. Your commitment will build the foundation for your success. Our commitment as Business Brokers, Intermediaries and Merger & Acquisition Advisors is to understand your needs, wants, financial situation, etc., and to help you understand the buying process.
Certified Acquisition Advisors will help you through this process.
KEY STEPS TO SUCCESSFULLY BUYING A BUSINESS
PRE-PURCHASE SELF ANALYSIS
So you think you want to buy a business! Congratulations! You have reached a milestone in your career. You're a unique type of individual - explorer, investigator, analyzer, evaluator, puzzle solver, creator, negotiator, referee, and counselor - which all add up to being an entrepreneur. Many would-be entrepreneurs develop a myriad of reasons to launch their search for their new business.
The reasons can be many and diverse, such as:
• Job Security is a myth
• Robots don't take vacations
• There is no "gold watch" waiting for them at retirement
• Loyalty to employers can often be a one-sided proposition
• America is heading back to a nation of family businesses
• Large corporate cultures do not conform to their personal beliefs and values
The list can drag on, but the reasons for buying a business usually stem from your heart, your inner being, your core values and core beliefs, and most of all, from your lifelong dream. Your 'head' probably gave you many reasons to 'get another job', and the heart and head probably have been in a battle for several years. Before buying a business be sure your head and heart are in agreement.
So, Examine Yourself First
DUE DILIGENCE ISSUES
Due Diligence is the term used in business acquisitions to describe the investigation process and the attention and care needed to protect the parties. It is the process of proving to the buyer that there is "an engine under the hood." Due Diligence involves reviewing the accounting records to determine the numbers are as stated in the offering documents. This may involve reviewing tax returns, invoices, receipts, payroll and other financial documentation. Due Diligence will also entail an investigation of all factual information mentioned in the offering document as well as a review of identified business issues not fully discussed.
Buyers are responsible for the due diligence. Intermediaries do not prepare the documents or verify the information received from sellers. A seller disclosure statement should be requested to have the seller attest to the correctness of the information, but it should always be verified by the buyer. Although Intermediaries do not vouch for the accuracy of the information provided by the sellers, we will work closely with you and your acquisition team to make the information requests while you conduct your due diligence efforts.
It is wise to have your accounting firm assist you in your financial due diligence. Other advisors such as attorneys and engineers may also be needed. Beware, the costs of due diligence could be costly and are borne by the buyer. This not a time to penny pinch.
THE BUYING PROCESS
From the beginning of your search to the successful closing, you will have many concerns and uncertainties, from emotional issues to technical issues to strategic planning issues. You can count on Certified Acquisition Advisors (CAA) to guide you objectively throughout the process. We will help you determine your needs and goals, evaluate the opportunities, determine a realistic value range and guide you through the negotiation process. You won’t be alone.
We’ll help you avoid common buyer mistakes and keep you focused. Buying a business takes planning, determination and dedications. There are a lot of potential acquisition candidates and, without a structured approach, it’s easy to get frustrated. Completing our buyer questionnaire will get you started. We also highly recommend that buyers update their resume, not only to help them evaluate their skills, but also to demonstrate their abilities to the sellers. Preparing a personal financial statement is another key component of a business search.
We’ll help you work through the buying process and become an entrepreneur.