An acquisition business plan needs to be developed before you begin your search to buy a company. Three overall categories of decisions need to be made.
- Why do you want to buy a company?
- What type of company do you want to buy?
- How are you going to go about buying the company?
In determining why you want to buy a company, you should ask yourself and develop answers for each of the following questions:
- Do you want to run the business yourself or do you want others to help you?
- How long you plan to keep the business;
- Whether you plan to buy other businesses over time
- If buying additional companies over time, do you plan to buy related or unrelated companies?
- In determining what type of company you want to buy, you should ask yourself, at the outset:
- What industry are you interested in?
- How large a company do you want to purchase and manage?
- How profitable does the company need to be?Clarifying these issues in your mind will advance your efforts at selecting the appropriate company.
Reference: “How to Acquire the Right Business”
by John Psarouthakis and Lorraine Uhlaner