05: Buying a business

Acquisition can deliver economies of scale and provide an existing company with access to required specialist skills and new customers, but it can also be unsuccessful if the financial and management resources of your company (as the acquiring company) are drained and the perceived value from the acquisition is unrealised.

Strategic and cultural fit can be just as important as profitability, and particular attention should be paid to whether management and staff are likely to work effectively with your existing staff.

When you find a suitable business that you want to purchase, you should register formal interest in buying it with the vendor’s appointed advisers and not with the incumbent management. How you propose to finance the purchase and the future plans you have for the company will need to be presented.