1) Do you want to run the business yourself or do you want others to help you?
2) How long you plan to keep the business;
3) Whether you plan to buy other businesses over time
4) 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:
1) What industry are you interested in?
2) How large a company do you want to purchase and manage?
3) How profitable does the company need to be?
In developing a plan for how you plan to go about buying a company, resolving the following issues at the outset will affect the types of investors you will attract and potentially, how successful your search will be:
1) Where will you go for the money?
2) Who will help you in your search?
3) What personal arrangements will you need to make until you find and purchase the company?
4) How do you plan to find the right company?
5) What is your exit strategy? That is, how will investors be able to get their initial investment out of the business over time?
Clarifying these issues in your mind will advance your efforts at selecting the appropriate company.
This article is an overview of step two that is explained in further detail in “How to Acquire the Right Business” by John Psarouthakis and Lorraine Uhlaner; Published by Xlibris, 2009. This book covers the 15 key steps involved in the complex and demanding process of buying the right business. It includes the search, selection, evaluation, pricing, negotiation, closing and managing the start of an acquired business. Buy this book.