There is a lot involved in taking over a business. It is important to map out all the options in advance, but certainly also the risks. We give you 6 tips for a company takeover.
1. The preparation
Be well prepared if you want to buy a company. An acquisition requires a lot of care and attention, so there is a good chance that you will be home less often. A home front that is behind your choice is therefore an advantage.
Make it clear for yourself why you want to take over a company, this too can help you in your choice and later in the takeover process. Make sure you don’t have all your focus on one company. Good alternatives strengthen your negotiating position.
2. Identify value
Once there is a potential company, you will have to calculate the value. It may be that the company is in a much worse position than you think or that there are risks that you could not have foreseen. Calculating this value is a complex matter that takes many different aspects into account. Hiring an independent party to help you with this is therefore not a bad idea. A good analysis ensures that you get value for money and that you do not pay too much.
3. Talk with the right people
Start the conversation with important pillars in and around the company to get a real insight into how it functions. This can be employees, suppliers and customers. Be aware that the selling party does not always like that. That these conversations are important for the sale to continue can be a good reason to have them. In addition, it has the advantage that you give internal people the opportunity to give their vision. They will feel involved and this will help you after the acquisition.
4. On good terms with the owner
Good interaction with the owner of the company is important. He ultimately decides to whom he sells it. It is therefore not wise to discuss your plans in detail with him or her, because your vision of his or her company is, indirectly, a form of criticism of the working methods within an organization. By leaving the negotiation to another party, you prevent emotions from taking over. An adviser can conduct the negotiations in a neutral manner, so that the acquisition process can be furthered and the negotiation does not end up as something that stands between you and the owner.
5. Take and give time
The process of a merger or acquisition can take six months to two years because a lot has to be arranged in the financial, legal, administrative and organizational areas. By taking the time and ensuring that everything is properly arranged, you prevent yourself from being confronted with unpleasant surprises afterwards.
6. Make sure that you are alone at the helm
Make clear agreements with the seller. This also applies to the earn-out scheme. Herein a part of the purchase price depends on future profits. This of course has advantages, but a major disadvantage is that the seller will look with you. He wants to keep control to earn more while you want to manage the business your way. A seller usually stays with the company for a few months to six months. Spend this time in a useful way and gain as much knowledge as possible by visiting customers and / or suppliers together so that he can introduce you.
These were our 6 tips for a company takeover. Do you need more advise when it comes to company takeovers? Read about it in this blog.