| There are no "rules of thumb" in the
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| | because it is unrealistic to think you
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| pursuit of companies to
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| | will find the exact,
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| buy. Each purchase opportunity has to
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| | "perfect" acquisition opportunity. There
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| stand on its own merits.
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| | are, however,
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| There are, however, attributes of
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| | business attributes, like these listed
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| acquisition candidates that
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| | below, that are best
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| need to be defined for what they really
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| | left with the current company owners:
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| are before additional,
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| | The sellers have previously terminated
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| limited resources are put at risk in a
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| | two or more purchase contracts
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| potential deal. It is
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| | The current business owners have no
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| absolutely critical for any proactive
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| | clear, compelling reason to sell
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| business buyer to
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| | The sellers cannot provide basic
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| understand, consider and deal with
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| | financial information
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| specific business
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| | The business is completely dependent on
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| characteristics that add unnecessary
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| | one key employee
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| financial risk to the
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| | The seller will not provide any form of
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| investment opportunity at hand.The
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| | "earn-out" based on future company
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| purpose of this article is to highlight
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| | performance
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| characteristics of
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| | The business relies on limited natural
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| acquisition candidates that you should
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| | resources to produce its product or
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| consider absolute "deal
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| | service
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| killers". These are brought to your
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| | Improper application of the company's
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| attention because it is
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| | product/ service = major $ liability
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| very common and natural to get so far
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| | The company has not been profitable for
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| down the due diligence
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| | the last 3 years
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| trail on a company you have worked so
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| | Pending significant legislation possibly
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| hard to find, that IS
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| | impairs future growth
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| for sale, that is right in your industry
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| | Key personnel will not sign employment
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| "comfort zone" and
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| | contracts or non-compete's
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| not see the inevitable financial
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| | Payment on acquisition debt exceeds 50%
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| disaster looming down the
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| | of after-tax profits
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| road because you became "blind" to what
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| | There is an insufficient pool of labor
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| the future business
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| | or talent to grow the business
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| potential will be, versus the potential
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| | There is no technical or knowledge
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| of what you think it
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| | barrier to entry for the targeted
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| could be!Buying Quality Businesses is a
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| | business niche
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| "Number's Game"There is a direct
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| | Key patents are about to expire
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| relationship between perceived value of
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| | Only one supplier can provide a key
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| something that is in very limited supply
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| | product/ service ingredient
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| and the time and
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| | One customer equals greater than 20% of
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| effort you have invested to find it.
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| | total annual sales revenues
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| Quality businesses, with
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| | A viable competitor offers ALL the
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| extraordinary growth potential, that are
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| | products and services your customers need
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| for sale, are like
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| | There is no customer purchase loyalty
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| the proverbial "Diamond in the rough" or
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| | The overall demographics of your
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| "Needle in the
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| | targeted market(s) are negative
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| haystack" analogies ... it takes removal
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| | Extraordinary product/ service
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| of tons of dirt and
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| | warranties are firmly established within
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| mounds of hay to find what you seek!In
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| | the industry
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| any proactive business acquisition
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| | The product must be manufactured
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| pursuit, a seasoned
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| | overseas to effectively compete
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| business buyer will tell you that
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| | Targeted, primary markets have had no
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| finding viable companies
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| | growth the last three years
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| that can be purchased for reasonable
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| | There is existing or pending, noteworthy
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| terms is a "number's
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| | legal encumbrances against the company
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| game". Thousands of company candidates,
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| | You determine the current business owner
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| that lead to hundreds
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| | lies to you about "small" details
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| of contacts, which lead to ten's of
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| | Assuming you have clearly defined and
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| acquisition conversations,
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| | documented your critical
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| that hopefully lead to one company
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| | Business purchase criteria well in
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| purchase!Going into any business
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| | advance to starting your
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| acquisition effort, knowing what it
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| | business acquisition program, you will
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| takes to find and eventually secure a
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| | often start to
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| business purchase deal
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| | compromise your purchase criteria as you
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| has a dramatic affect on the definition
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| | continue to invest
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| and your eventual
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| | more time and money to find your "ideal"
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| allegiance to your business purchase
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| | acquisition
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| criteria. If your
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| | candidate. This is a "cardinal sin" in
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| purchase criteria are too "tight" and
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| | merger and acquisition
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| your commitment too
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| | pursuits. Compromising your purchase
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| rigid to that criteria, you may quickly
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| | criteria is natural
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| feel you'll never find
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| | tendency, but ultimately a fatal
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| your "ideal" company to buy!Absolutely,
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| | mistake!The importance of defining,
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| Unquestionably, No Brainer, "Deal
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| | understanding and truly committing
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| Killers"Attempting to find and qualify
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| | to your critical company attributes is
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| businesses to buy is an
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| | most important during
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| iterative and complex process. Each
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| | these frustrating times. The most
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| opportunity eventually
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| | effective business buyers
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| stands on its own merits and purchase
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| | are disciplined business buyers.
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| compromises will prevail
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