More and more young entrepreneurs are willing to sell their new business for various reasons. Still, it’s difficult for a person who wants to buy a company to find a profitable one in their region.
Many young sellers don’t know how to promote the fact that their business is open to an acquisition. Potential buyers also don’t know where to look for a business for sale.
For this reason, future buyers need to be patient and look carefully. As soon as a potential acquisition sounds interesting, the person who wants to buy it should start conducting in-depth research to look into the business at hand.
This is a good way to learn more about the business and decide if it is a worthy acquisition or not.
It is a lot easier if you talk to an expert before you make any decision
A safe way to see if you’re not overpaying for something which will turn out quite unprofitable is to ask for an expert’s advice.
A person active in this field knows what you should look at and how a profitable business for sale looks like. If you are wondering who these people can be, we will mention a few categories:
– Lawyers and accountants
– Business brokers
– Commercial real estate agents
– Bankruptcy trustees
A special category is represented by dedicated websites. Here, you can find many businesses for sale in your area if you search by using some simple keywords.
For instance, if you live in Los Angeles, you can type Los Angeles business for sale in your browser, and you will find many options. Like we mentioned before, you should look for more information on business before you decide to buy it.
How to find proper financing for your business
Apart from the people who can help you buy the right business; another important step is to think about ways to finance your new purchase. In this stage, your purpose should be to maximize your repayment flexibility.
Your investment should be the basis, but a term loan is a popular option as well. In this case, you should select a financial institution which is secured on the assets of the company.
Another method is to seek financing from the owner before he or she sells the business. You’ll understand this process better if you talk to a broker or other type of expert in the field. The specialist will help you plan your purchase step by step so that you can avoid a shortfall.
In this case, it’s best if you create your business plan and discuss it with your banker or future investors. The business might have been profitable before you bought it, but financiers want to know how you will run the company and make it work.
There are various ways to finance your newly purchased venture, consider the following examples:
- Crowd Funding
- Find Angel Investors
- Apply for Grants
- Business Incubators or Accelerators
Funding your business is important, but it won’t succeed if you don’t know how to manage it. Therefore, you need to assure a smooth transition of power.
Your business isn’t any good if it doesn’t make a profit. Take the helm, and make sure everything works out as it should.
Audit the Existing Process and Practices
You should have done it before the purchase. Anyhow, learn how the company works. Invest your first few weeks learning the company inside out.
You will never understand how a business works until you operate it. Every company is unique, and you need to understand it before making any changes. The audit will help you to find and address the key gaps, especially if you bought a startup.
Startups are focused on strengthening their position, and in doing so, they forget to implement basic securities.
Traditional security mechanisms are not affordable for startups. So, you need to see what are the current security controls before acquiring the business.
Following are a few things to look for:
- What systems or (cloud) server they use (for customers and internal)?
- How is the access system controlled? Does it use unique user accounts, password requirements, two-factor verification?
- How is the system managed? What are the standards of the document for patching and arranging them?
Try bringing a third party to audit security process, review system and find weaknesses in the system.
Speak with the staff
You need to take the team on board with you. It’s very unlikely that you will keep all of the old staff. Most buyers plan to bring their people, and sometimes this becomes a costly mistake.
A common challenge you face after the acquisition is fear at all levels of the organization. The fear of the unknown and change will alter the direction.
So be transparent with employees. Speak with them and assure you are interested in their best interested. Get to know them, and how they work.
Communicate directly with the team and include them in your plan.
Learn the Company Culture
Analyse the company culture before changing anything. Understand the key points that led to its success.
These factors are the foundation of your evolution, understand and respect their culture. You can’t throw your suggestions and expect they will be adopted.
You need to develop a plan that explains how your change will improve and benefit the company and its members.
Plan Your Changes Carefully
You can’t just change everything. This is a recipe for disaster. Yes, you want to make a change, but you can’t do it overnight. Implement your change in such a way that it has minimum disruptions on the company and its employees.
When the business is sold, it causes uncertainty, and it’s your job to ensure stability within the organization.
When you prove your changes are leading to success, it will inspire confidence, and people will follow suit. The speed of your changes or revolutions depends on the state of the company in which you acquired it.