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5 facts you should follow to acquire a business

Nearly there are about 405 million Google entries about acquiring a business. Anyhow those advices of acquiring are mostly based on process not based on strategy.

It is not easy to become a market leader along with organic growth by only yourself. Within its 21 years Google has done more than 200 acquisitions. The first one has done by 3 years after its incorporation. So it is clear they have done 10 acquisitions for a year. The wisdom and abilities that can gain by acquisitions avoid the things that can do by yourself. The decisions of taking over on who and when base on personal opinions. Followings are some tricks you should get to know when acquiring a business. Those are ideas of a resource person who is a successful businessman.

1). Take M&As to the genes of your company.

Before searching and studying about the other companies, you should self-study about your company. Getting M&As right will affect the genes of the company you are going to acquire as well as your own company. If the genes don’t assist the acquisition, then the deal may not be successful.
The resource person’s company has done the first acquisition with the help of the staff with only 7 members. But the acquired company had nearly 30 employees. Others will think that this movement will lead the company towards losing. But with the help of M&As you can be strong.

2). Look for a good business not a good deal.

Though those two words look similar, there is a big difference between them. A good deal represents the price of the acquisition. But a good business contains the workers and the culture. If you make a decision only considering it as a good deal, you will face a big trouble. Because the culture of the acquired company may not suit your opinions. Then it is not easy to reach the success. It doesn’t mean acquiring a company which seems as a good deal is wrong always. But you must give your priority to think of the suitability of the deal.
The other challenge you are going to face after an acquisition is combining those two companies to a single working unit.

3). Think of doing due diligence with the employees. 

Doing financial due diligence is a significant step in the acquisition procedure. But it is most important to do due diligence with employees. You should spend your time not only with the CEO but also with the employees too. Then you can get to know about the culture of the company and the way they are making decisions. And you should find about the knowledge of the group and the way they recovered from losses.
Then find out about are they repeating the same failure or take lessons from one and get rid of doing that again. You can just speak with people of the group and spend the time with them by observing them. Then you can get to know about the status of the business you are going to acquire more than the CEO explains during meetings.

4). Depart from your favorite zone.

Discuss with people at their office. Then you can have a better feeling about your new partners. When you don’t feel comfortable by staying around the company you are going to acquire, it may not be a suitable deal for you. The resource person has forgotten good deals that didn’t feel for him as suitable when spending time there. Spend the free time with employees and their families to look for their collaborations away from the office.

5). Prefer to pay upfront.

After doing due diligence if still you satisfy about the company, you can go to an acquisition. Your comprehension level should be up in this situation as you are going to give up protection procedures such as down payments and earn-outs. According to the resource person’s company logics, they pay everything upfront on day one.
This may be not suitable for every company but the resource person believes in loyal partnerships. You can give your new employees an option to go away by paying them upfront. Because after that if still they are willing to stay, that may be for a correct reason. Because of that the first day after an acquisition is like the commencement of a new beginning.
The above-mentioned facts may not work for 100% of acquisitions. But it will suit for many of them. Most probably when you are buying a company it is for the intelligent working squad. Because they are the reason for the success of the company. So when you are acquiring a business try on above-mentioned facts because they may help you to be successful.
5 facts you should follow to acquire a business 5 facts you should follow to acquire a business Reviewed by ViralBlossom on May 23, 2020 Rating: 5

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