Buying a Company at 30 Years Old

8 Key Takeaways on Buying a Company

Étiquettes : ,

Last Monday, I had the pleasure of presenting a « buy your own » company workshop to the young entrepreneurs and enthusiasts of « Cercle Dynamique » in Brussels.

Just like you, some of those young men and women did while some did not have a background in economics, negotiation, or M&A. The idea was to create eight guidelines to focus on when looking to buy a company which are easily understandable for professionals as well as for complete newbies.

M&A is like marriage, you are bound for life with no option on a free divorce. Pick the right partner, and write stuff down. Here are the top 8 takeaways on buying a company:

1) Decide what you are looking for

Decide what you want in terms of location, size, industry, etc. Think about your budget as well – do you even have one?

2) Do your research

Visit companies close to home, check online, and know that there is NO harm in asking. Be careful: online, you will find one good opportunity for ten bad ones.

3) Consider getting help

Professionals will safeguard you from financial, legal, and emotional pitfalls. A sparring with a deal-making attitude will only help you move faster.

4) Understand the counterpart’s motivation

« For sale » does not mean that something is wrong; remember that. People have a variety of reasons to sell a company. What is of utmost importance is to understand why a seller sells. If you understand the motive of the counterpart, it will ease negotiations. The same goes for you – be clear about your buying motivation.

5) Complete Due Diligence

As your mom used to say: Do your homework! We mean, do the research. Team up with experts and do not leave anything up to change, be diligent.

6) Acquire the necessary funding

Funding knows many forms. You can use seller financing (vendor loan, etc.), business angels, venture capitalists, FFF’s (fools, friends and family) or just go knocking at the bank’s door. Whatever you decide to use in your financing cocktail do not overstretch and calculate an error margin.

7) Draft a sales agreement

Protect yourself with a waterproof Sales and Purchase Agreement. The SPA should define the scope of transaction, financial metrics, and formulas in detail. Once all is written down, make sure you understand and agree with every single word on that paper.

8) Keep your communication clear and transparent at all time

Communication is key in any business transaction, especially in one as important as a business purchase. Make sure all parties involved are constantly aware of what is going on.

Eager to learn more on valuation, the acquisition process and our conclusions? Check out the full slideshow here.

This article was written by Jeroen Maudens, Partner in our Brussels, Belgium office. If you would like to learn more about buying a company, take a look at the 10 MOST COMMON OBSTACLES WHEN BUYING A COMPANY.

Artículos relacionados


The process of buying a business: due diligence The indicative offer has been placed and the letter of intent has been signed. The next steps are to confirm that, in fact, the business that we want to buy has all the characteristics that we believe it has. Everyone likes surprises, but not in the ...
The importance of a LOI when buying a business Surely you have heard of the expression “words are gone with the wind.” Keep this phrase in mind when you are planning your M&A strategy. You must understand that there is a great difference between a handshake with verbal agreement and a letter ...
Process for buying a business: the indicative offer You already have identified the best business to buy, started the acquisition process and met the seller. Now, if you are interested in learning more about the company you want to buy, it is time for you to make a move and present an indicative offer...

Il n'y a pas encore de commentaires

Écrire un commentaire

Partager cet:

Les plus populaires

Where is your buyer? ONEtoONE

Abonnez-vous à notre Newsletter:

Les plus populaires:

Now is the Time to Sell Your Business

It may have taken you a lifetime or even generations to create substantial value in your business, but with the right planning and advice it may take only a year or two to double that value. Succession issues, retirement, technology, globalism, scale, etc. are all viable reasons to be thinking about selling your business. But […]