Do you want to start your own business or accelerate the development of your company? Take on a deal! Although it is a complex procedure, requiring a certain financial investment, the trend today is the acquisition of a company. A true alternative to creation, the acquisition is seen as a way to develop a business that is already well established in the market, to face challenges or to take over a family business. Decided to embark on the adventure? Here are the different steps to take to take over a business.
1. Business to take on: define your project
First of all, start by defining your project to facilitate your search and find the company to take over. As with creating a job offer, it is necessary to define your needs sufficiently to find the ideal candidate. To establish the profile of the type of business to be undertaken, it is necessary to determine:
- The desired sector of activity,
- The size of the company (number of employees, turnover, etc.),
- The type of business (family business, start-up, company in difficulty, company with a certain notoriety, etc.),
- The geographic area of the business.
At this stage of reflection, ask yourself the right questions: do you have the skills to take on this business? Should I train? What financial resources do I have? Acquiring a business has the advantage of being up and running as soon as it is acquired, but it requires, on the other hand, being up and running very quickly. That’s why it’s also good to ask more personal questions: How much work time am I willing to dedicate to my new activity? Can I afford a drop in income?
The acquisition of a business requires a complex procedure, based on several aspects (financial, tax, legal, etc.). To find the rare pearl and carry out your project, surround yourself with experts. This will allow you to set a recovery schedule and support you in the best way possible, from target search to closure. Note that the procedure can take between 6 months and a year.
2. Find the right business to take on
After defining your project, you can move on to researching your future business. This is a complex task, as entrepreneurs looking to sell their businesses remain quite discreet. In fact, they do not want the transmission procedure to tarnish their reputation and have a negative impact on society. To gain access to information, you will therefore need to arm yourself with patience and perseverance.
In addition, if you do not have a network or contact with the target company, you risk having your business stolen by:
- Target partner companies interested in creating subsidiaries in your development project.
- Employees of the target company who have heard of the intention to sell.
To find the company to take on your dreams, take the time to develop your professional network. An opportunity can happen very quickly, you will have to seize it as soon as the opportunity arises. Some companies are very attractive and have no problem finding buyers. If your research is aimed at a modern and very competitive sector, be reactive and attentive.
Finally, be attractive! You should prepare in case a company is interested in meeting the manager and convincing him to leave his business to him. Before going to the interview, prepare for the interview. Gather as much information as possible and highlight your strengths (experience, qualities, skills, etc.). The objective is to stay in the buyers race and win the battle.
You should know that the leader of the company you covet put all his time and all his heart into the development of his business. He will therefore be particularly selective in choosing the buyer. In order to make a difference and convince him, you’ll have to make sure you reassure him about the sustainability of your business.
3. Financing and Business Plan: Setting Up Your Acquisition Plan
Once the company has been selected and the sale registered, you will have to define the business plan and make the legal and financial arrangements for the acquisition. The most common forms of recovery are:
- The repurchase of assets or goodwill.
- The repurchase of securities (purchase of shares or part of the target company).
Creating a business plan is essential to confirm the viability of your project. This will be the tool that funders will use to trust you, adhere to your project and accompany you or not in the resumption of the desired activity. Establishing a business plan is quite complex, so take the time to put it together.
In detail, know that it must contain:
- A presentation of your profile (skills, personal contributions, industry knowledge, etc.).
- A description of your project (structure type, acquisition type, etc.).
- A presentation of the target company as detailed as possible (assets, personnel, etc.).
- The company’s financial situation.
- Your development strategy to continue the company’s growth or turn it around, in the case of a company in difficulty.
- The target company’s current competition and future competitors.
- The offer of the company’s products or services.
- A calendar showing the different stages of recovery.
Once the business plan is set up, gather all the personal funds you have, apply for your relatives and finally head to the banks. The latter will be much more inclined to trust you and give you a bank loan if you arrive with a financial contribution and are ready to risk your personal money.
The contribution of banks can represent up to 70% of the acquisition cost. Therefore, it is essential that you can convince them with an irreproachable business plan. In addition to banks, you can also apply for honor loans (up to €40,000) or investment capital funds.
4. Close the deal and negotiate the sale
Negotiating the sale is the last step. A memorandum of understanding, specifying the transfer conditions, must be signed and commits both parties. You will have to wait a few more weeks to:
- Sign the memorandum of understanding,
- Sign the transfer deed,
- Carry out the company audit,
- Gather the necessary funding,
- Establish the legal framework.
To speed up the process of acquiring a company, do not hesitate to seek the help of professionals in the legal, tax, financial and administrative areas. In addition, we offer online solutions to guide you through the entire procedure and to advise and support you at every step of your recovery.