Are You a Business Owner Looking to Grow by Acquisition or An Individual Looking to Buy Your First Business?  There is a Better Way that Should Guarantee Success!

One of the less common areas in the business brokerage industry is the idea of growing a business by corporate acquisition, in essence buying a competitor. This same approach also works well for an individual looking to buy a small or mid size business.  Many business owners have thought of this – but few will complete an acquisition.  Why? Often it is the difference between proactive and reactive buyers.  Let’s look at the differences between reactive and proactive approaches to buying a business.

A reactive buyer is one who waits and hopes a good acquisition opportunity will come along at the right time.  The buyer may actively search listings of businesses for sale, yet even this is reactive as they are only looking at businesses who have already decided to sell.  Alternatively, they could approach a business intermediary and say: “If you come across something I might be interested in let me know and I will take a look at it.”   There are good business intermediaries who do keep an ear to the ground for his potential buyer.  Bear in mind that this business intermediary will likely need to have the buyer’s industry as a specialty niche, one who knows the majority of businesses in the appropriate geographic area and understands the industry business parameters.  This is virtually the definition of reactive!  The buyer is waiting for the phone to ring.  Is that the way their sales team brings in new customers?

The odds of acquiring a firm or competitor this way are slim.  When a good buying opportunity surfaces, how likely is it will be a good time for the buyer?  “Something’s come up and I can’t do this now…”  Is it even a good opportunity?  In a typical geographic area there are rarely more than 2 or 3 similar businesses for sale out of what may be hundreds of firms.  That is not much a cross section to measure a business’ strength with regards to the industry.  Does the buyer have the time and wherewithal to concentrate on this effort when the opportunity knocks?  Is there a financing plan in place?  How does this affect the business and pro forma plans? There are likely very few successful businesspeople that would pursue any other goal in this manner.

What does a proactive buyer look like?  A proactive buyer commits him or herself to making an acquisition.  The commitment to acquire should be part of a strategic plan, including parameters that define the acquisition: industry vertical, revenue size, geographic area to mention a few.  Is the buyer expanding geographically or moving into new product/services areas or reaching out to a new customer demographic?  A clearly defined picture of the acquisition raises the chances that an acquisition can be absorbed smoothly into the existing organization.  The buyer also should mentally set aside time and energy to devote to the acquisition effort, say 5% of his time.  There needs to be some thought given as to how the down payment and financing will take place.  In most cases, the financing may be covered in the cash flow of the acquired business.  Strategic acquisitions are more attractive to third party lenders, because the acquirer has industry experience and their own cash flow to add additional strength to the deal.

A program with a plan has a higher chance of success.  But if the buyer has not done this before, it usually makes sense to retain a business intermediary who has this unique experience and track record.  The intermediary  will have a well-defined program to coach the buyer through the entire process, including such items as defining the search parameters, scripting the outreach dialogue, assembling the list of pre-qualified candidates, collecting information to qualify the candidate, and determining if both buyer and seller should move forward.  The business intermediary can initiate a conversation with a potential seller to determine on a macro level if a seller is a good match.  Questions may involve percentages of revenue along product/service lines, staffing, service area, client/customer demographics, etc.  An effective campaign can act as a survey on the local industry revealing local industry ratios, trends and practices, enabling the proactive buyer to effectively evaluate his own firm and others. With the additional information an attractive deal may be quickly identified.  Perhaps more importantly is the issue of maintaining confidentiality.  In fact many times a third party is required to initiate any such sensitive discussions.  After all, can you call up your competitors and say, “Do you mind if I take a quick look at your financials?”

Because you are reaching a much broader audience as opposed to the number of available businesses publically listed, finding a successful match is much more likely.  Contact an ROI intermediary or go to our website, www.roibusinessbrokers.com, to learn more about our unique Proactive Acquisition Search Service (PASS) Our service not only helps firms grow by acquisition but also works for first time buyers targeting their  ideal business.  Let us show you how this strategy can be faster, less risky and less expensive than trying to grow by standard organic sales force methods or starting from scratch.  Such a solution may produce a positive reaction in many a business owner!

By: Paul Corrigan

91 Comments

  1. [URL=https://sites.google.com/view/shootball/بازی-پوپ – سایت بازی پوپ[/URL –
    [URL=https://sites.google.com/view/shootball/سایت-بت-مجیک – سایت بت مجیک[/URL –

  3. I have been surfing online more than 2 hours today, yet
    I never found any interesting article like yours. It is pretty worth enough for me.
    Personally, if all website owners and bloggers made good content as you did, the
    internet will be much more useful than ever before.

  5. Hey just wanted to give you a quick heads up.
    The text in your post seem to be running off the screen in Chrome.
    I’m not sure if this is a formatting issue or something to do with web browser compatibility but I thought I’d
    post to let you know. The design look great though! Hope you get the issue solved soon. Thanks

  9. generic cialis black 800mg tadalafil cost of cialis 20mg tablets

  10. Greetings! Very useful advice within this post! It’s the little changes that make the largest changes.
    Thanks a lot for sharing!

  15. I like what you guys are up too. This sort of clever work and reporting!
    Keep up the terrific works guys I’ve included you guys to
    blogroll.

  22. 15 benadryl claritin buy periactin pills

  24. Ahaa, its pleasant conversation on the topic of this paragraph
    at this place at this webpage, I have read all that, so at this
    time me also commenting here.

  27. I visited several web sites however the audio feature for
    audio songs existing at this site is in fact fabulous.

  29. It is perfect time to make a few plans for the future and it’s time to be happy.
    I’ve learn this submit and if I may just I want to recommend you few fascinating
    things or suggestions. Perhaps you could write subsequent articles referring to this article.
    I desire to read even more things about it!

  31. I just could not go away your web site prior to suggesting that
    I really loved the usual info a person provide to your
    guests? Is gonna be again frequently in order to inspect new posts

  35. Hi, i think that i saw you visited my blog so i came to “return the favor”.I’m trying to find things to
    improve my site!I suppose its ok to use a few of your ideas!

  39. I’ll right away grab your rss as I can not find your e-mail subscription link or newsletter service.
    Do you have any? Please allow me realize so that I may just subscribe.
    Thanks.

  43. I read this article fully concerning the difference of latest and earlier technologies,
    it’s amazing article.

  44. Hey there superb blog! Does running a blog such as this require a great deal of work?

    I have very little understanding of computer programming but
    I was hoping to start my own blog soon. Anyway, should you have any recommendations or tips for new blog
    owners please share. I know this is off subject however I
    just had to ask. Cheers!

  49. I’ve been browsing online more than 2 hours
    today, yet I never found any interesting article like
    yours. It is pretty worth enough for me. In my view,
    if all webmasters and bloggers made good content as you did,
    the internet will be much more useful than ever before.

  50. ¿Necesita urgentemente un préstamo en efectivo? Consulte préstamos grandes y pequeños en línea y obtenga un préstamo rápido para aquellos que están endeudados y más.

  52. I am also writing to make you know what a impressive encounter my friend’s girl gained reading through your web page. She learned plenty of pieces, which include what it’s like to possess an amazing helping mood to let most people smoothly know several tricky topics. You undoubtedly surpassed visitors’ expected results. Thanks for showing those valuable, trustworthy, revealing not to mention unique tips on your topic to Sandra.

  58. I visited multiple web sites except the audio feature for audio songs
    present at this web site is genuinely fabulous.

  61. Thanks a lot for sharing this with all people you actually recognise what you’re talking about! Bookmarked. Please also discuss with my website =). We could have a link exchange arrangement between us!

  62. Everyone loves it when people come together and share thoughts.

    Great blog, continue the good work!

  65. I have been browsing on-line greater than 3 hours nowadays, yet I by no means found any interesting article like yours.
    It’s pretty worth enough for me. In my view, if all webmasters
    and bloggers made excellent content as you probably did, the
    net might be much more helpful than ever before.

  81. hacklink servisleri, instagram hacklink hizmeti satın al.

Add a Comment

Your email address will not be published. Required fields are marked *