Buying a Business

Planning the Purchase of a Business

Small to medium companies that want to increase the size and value of their business through acquisition do not have the time to both run their business and go through the process of finding good acquisition candidates.

The business owner also needs to know that the process of purchasing a business will be done in a very confidential manner that does not affect current business, including customer and employee relationships.

Main Street web sites like BizBuySell will seldom have businesses that match the needs and expectations of the Buyer. A business intermediary, like Edge Business Associates, is better skilled to identify potential acquisitions and establish interest on the part of the seller to sell even when they are not actively trying to sell their business.

Strategic Buyer Approach

As part of the Strategic Buying Plan, Edge Business Associates will outline the unique approach that we will use for each strategic buyer engagement. This will include an understanding of the market and best selling companies to target and the approach that EBA will use to create the opportunity to buy the business.

Established businesses looking to grow through acquisition need to spend significant time and effort to identify strategic business acquisition targets and methods to determine owner interest in selling the business. This will take away from the successful running of the existing business.

Potential buyers are looking for a very specialized small to medium sized businesses that require strong technical capabilities to run. Specialized businesses including design, medical and service firms will also find it difficult to locate these businesses when most of the best target companies are not listed for sale.

Most of the identified seller organizations will not likely be in an active mode looking to sell their business. To find these strategic Seller candidates and to determine interest in selling their business requires an active effort by the Business Broker to locate and interest the potential Sellers. This effort is best done via a knowledgeable Strategic Business Broker.

Considerations in the STRATEGIC BUYER Approach include:

  • Who the key Seller targets are
  • How these Sellers will be contacted (personal letters, emails, phone calls)
  • How many Sellers will initially be contacted
  • How Edge Business Associates will perform due diligence in both assessing the interest in selling the business and seller expectation on the sales price and terms
  • How Edge Business Associates will present the best candidates (usually 4-6) to the Strategic Buyer
  • How Edge Business Associates can assist the Strategic Buyer in identifying the best target Sellers
  • How to insure confidentiality with respect to both the Strategic Buyer and the target Seller who has customers and employees
  • Best approach for Buyer financing
  • Getting approved SBA lenders
  • Lawyers, CPAs, etc.

Edge Business Associates is the best intermediary to ensure that relations between the Buyer and Seller stay intact during the Strategic Buyer process.

Buyers may choose to either pay for the business at the closing or use the Transition Approach to buy the business based on performance payments to the principal Seller over a specified period (3 -5 years or more after the initial sale). This significantly reduces the risk associated with the buyer paying everything up front.

While the Transition Approach insures that the knowledge and customers of the Seller are smoothly transferred, it can significantly increase the sales and profitability of the Seller business when additional resources (financial, selling, marketing, technical, support) are applied to the business. It also offers the Seller the opportunity to significantly increase the sales price for the business.

Edge Business Associates will help you align your goals for growth by helping you buy the right business to get you there.

For more information on Buying a business, contact Hank Allard at Hank@EdgeBusinessAssociates.com