A business acquisition provides a turnkey solution for investors looking to either purchase their own business, or expand upon an existing portfolio. For novice business owners, an acquisition allows them to skip the inherent difficulties of launching and marketing a new business. Those already with companies, however, will find it a great way to expand market reach and share.

If you’ve spotted a potential business acquisition opportunity, you may be wondering what steps you need to take in order to make your vision a reality. We spoke to Rick Smith, managing director of acquisition specialists, Forbes Burton, about the main things to look for.

Does the business align with your goals and strategy?

Different buyers have different goals they hope their acquisition will help them achieve. Some may need to turn a healthy profit straight away, while others may see potential to make changes that increase the value of the business down the line.

Whatever your goals, you’ll need to be honest with yourself about the company’s suitability to help you with them. It’s easy to sway your thinking to fit whichever opportunity you may spot, but this can lead you further away from what you really want to achieve.

Take a moment to think about what the perfect acquisition would look like. Then compare that against the business you’re considering purchasing. The odd small difference is fine, but if it looks dramatically different, it may be best to wait for something else.

Location

Unless your business is focused on online trade, you’ll need to consider how the location will affect the business.

Is there a lot of competition in the area? Does your target market live around there? There’s little point in opening a high-end surf shop in a low-income, landlocked town. The same business in an affluent seaside town meanwhile, could still suffer if there are already several well-established competitors there.

Go mystery shopping

If there’s scope to, it’s always worth visiting or using the business as a customer. This will give you an unparalleled view of the company’s strengths and weaknesses.

You may find some issues that put you off acquiring the business altogether. Look for employees bemoaning stock issues or arguing among themselves. If you think that there may be some bad apples among the workforce, you may find it difficult to turn their attitude around.

If you do eventually purchase the business, you’ll likely have many ideas garnered from your prior visit to implement.

Are premises involved in the sale?

While the addition of a business premise undoubtedly adds extra value to any acquisition, it can also carry a number of headaches.

Take a detailed look at any property included in a business sale. Nobody wants to be saddled with expensive repairs, and you could end up in serious trouble if the building is ever deemed unsafe for your employees to work in.

It’s worth taking a moment to think about how the building lends itself to possible expansion too if that’s something you’d like to consider in the future.

Hire a specialist acquisition team

The examples above are just the tip of the iceberg when it comes to buying a business. There are myriad legal and financial considerations that must be met along the way, and it can quickly become overwhelming for anyone not experienced in the process.

Forbes Burton have acquisition specialists on hand that can take care of the process for you, walking potential buyers through every step and avoiding the common pitfalls. Free no-obligation consultations are available for anyone considering an acquisition. Call 0800 975 0380 or find out more about our acquisition service.