When taking over a company, there are several things you need to consider
Your business is doing very well. You are ready for the next step, but do not yet feel the need to sell your company. You are increasingly thinking about how an acquisition would fit into your strategy. This could be to add another service to your business, increase your market share or for other economies of scale. There are several things to consider when acquiring a business. We have listed them for you.
Time is money
As in many cases, haste is rarely good. When you rush into buying a business, you may miss things. It is important to take the time to find out which company suits you and whether there are any unpleasant surprises after signing the purchase agreement. By giving the process time, you can act on the basis ofprogressive insight.
Provide a well-substantiated indicative bid
As a buyer, it is wise not to just call out an amount based on assumptions. The indicative bid is an important step in the buying process. It indicates how much interest there is from you as a buyer, but it is also an expectation around the final bid. Buyer and seller will have to meet each other in the buying process. When the indicative bid and the expectation of the seller are too far apart, there may be no purchase process at all. The indicative offer is a first step towards mutual trust. By basing it on facts through abusiness valuation it can be discussed rationally.
Lay down the expectations in a preliminary sales agreement
Drafting a preliminary purchase agreement allows for an open conversation about expectations. It is important that the relationship is strengthened rather than challenged during the fine-tuning process. Many business owners choose to hire a financial advisor so that they can step forward when negotiations are needed. This allows the business owner to focus on building trust, while the advisor concentrates on strengthening the negotiating position on a financial level.
Have an open conversation about expectations.
Provide the necessary funding
If you want to take over a company, you will obviously need capital. Various arrangements can be made with the seller. A financial advisor can advise you on theright financing mix at the lowest cost.
Organise an audit
During a business acquisition it is essential to extensively investigate whether the company is what you expect it to be. The seller has a duty to share with the buyer information necessary to make a decision about a potential transaction, but also the buyer has a duty to investigate in the context of the transaction. A due diligence consists of an extensive analysis of the financial, fiscal, legal and commercial activities and documentation within the organization. Of course, nowadays this is done digitally by means of avirtual data room.
The seller has a duty to share all necessary information.
Lay down all binding conditions in agreements
During the purchase process, various assumptions were tested, resulting in new agreements. The final purchase agreement and shareholders' agreement contain the legal arrangements surrounding the transaction. It is therefore important that these are laid down in detail. Acorporate finance consultant has a broad network, enabling him or her to suggest a suitable party.
Don't forget to celebrate your purchase
The time has come. You've thought of everything to have a sustainable transaction. It's now time to let the passion for the new business grow. Don't forget that this is a festive moment, after a fairly intensive process. This may well be celebrated extensively, before you immediately get down to business.