Business Advisor Can “Pilot” You to a Successful Business Acquisition
The decision to move forward with the acquisition of a business is a big decision, as well as a substantial investment of time, money, and effort.
There’s a big upside to this decision, such as the ability to build critical mass, improve market position and brand awareness, and to tap into opportunities in new markets and product offerings. In addition, economies of scale can help your company expand into new territory and take advantage of operating synergies and administration.
The acquisition process typically is broken down into four stages: pre-acquisition, due diligence, deal negotiation, and post-acquisition.
Independent Business Valuation
An integral component of the pre-acquisition and due diligence stages of the acquisition process is conducting an independent valuation by a business professional specializing in the valuation of companies for mergers and acquisitions. This professional valuation should be your yardstick for managing your expectations about your company’s market value. As the person most closely ingrained with the operation, the business owner’s opinion may be subjective; business owners have a tendency to have somewhat unrealistic ideas of their business’ value. That’s the rationale for an independent valuation. It will give you a more accurate idea of the worth of the business you want to buy and keep you from overpaying. A professional will examine not only your prospective business acquisition, but also the competition, the Sacramento area economy and business climate, and past business transactions similar to your situation. Stick with what they tell you. If you have a preconceived and unrealistic idea of the value of the business purchase, you set the stage for an unsuccessful and difficult sale. The process becomes frustrating, tedious, and stale. Your business advisor will prepare you and for a successful acquisition with the least amount of stress and with the best outcome.
Your business advisor, who will be experience in M&As, will eliminate much of the time and effort of the sales process, so that you have the ability to focus on preparing for the new business operations. A business broker will play a key part in the negotiation stage of the acquisition process, including:
- Communicating with decision-makers at the target company, including your understanding of their business and sharing your target company research;
- “Selling” or promoting your company’s strengths, upside, and future plans for the company targeted for acquisition; and
- Routinely relaying your company’s strategic wins and successes;
The acquisition process is frequently very emotional. It requires a deft and experienced hand at the helm. While it’s your money and your potential business growth, you need to give an expert some leeway to help you to a successful result. Think of the caption of the ocean liner. Even the most highly-regarded captain welcomes aboard a local professional pilot to take the ship through dangerous waters and to complete the berthing operation in port. That’s what Andrew Rogerson will do for your business opportunity. He has been in the Sacramento business community for many years, helping to close business sales, acquisitions, and mergers.
The acquisition process generally will take anywhere from five to 10 months. Your business broker knows that anything longer than that may signal untold obstacles or issues. This the time to determine what those issues are and how and whether to continue with the acquisition process.
As you can see, there’s quite a bit of information to keep straight when acquiring a business. Working with a qualified and experienced business broker will pay dividends. Your business valuation consultant will help you through the process and make a wise decision that will build your business for the future.
To discuss business acquisition opportunities in the Sacramento area, please visit our website Services and choose from the drop down menu the information you’d like.
For more immediate help, please send an email to Andrew Rogerson or call our office at (916) 570-2674.