When you or your company decides to pursue growth through acquisition, you generally have certain criteria in mind. As you search the market for possible acquisition opportunities, you can be left with a lot of options. The question for you now is: Are you looking to buy the right business?
Let’s go back to the point where you are simply looking for a business to buy. You have criteria – gross revenue and EBITDA targets, location in a certain region, a certain number of employees, etc. Surely, through due diligence and other methods, you would know if these numbers are realistic and if their projected numbers are indeed attainable.
Another (obviously) important criteria to consider is the industry. If you or your company is simply looking to expand operations, then you would certainly choose to buy a business within the same industry you are currently working in. In that case, there wouldn’t be much adjustment on your part because you know the industry and how the market moves.
But what if your company is looking to venture into other fields? Surely you would choose a company whose sellers are willing to train you during the turnover process. However, you should be cautioned, they could never prepare you for everything that may happen down the road. If the company goes south, does it mean you chose the wrong business to buy?
Not necessarily. The economic circumstances that could lead your company to ‘failure’ do not make your decisions the wrong ones. When a merger fails, it could be management issues that lead to that situation. After buying the business, your company starts calling the shots. If they aren’t the best and most strategic decisions, there’s nowhere to point the finger.
By the end of the day, it all boils down to you, the buyer. Any business for sale could be the right business for you so long at it fits all of the criteria you have set. What’s more, it all depends on your mental/psychological capacity to run the business, your skill sets and the ability to integrate it into your current company. It will be challenging but worth the rewards.