When the buyer of a company is preparing to make an acquisition he or she should begin to prepare a business plan on what they plan to do as the business is carried forward after the acquisition. This business plan for the acquisition should include the short-term and long-term goals, changes from the current business model, and the method for carrying out the transition.
Short-Term and Long-Term Goals
When you begin looking at a company it is usually because you believe there are some qualities that the company can add to your existing platform, or because there are some qualities that you can add to its existing platform. For example, one of the buyers looking at our client has extensive skills in developing websites, the client has the physical store in place but a very minimal amount of website development. It is important for the buyer so get his plans of development on paper regarding what he will do with the website and what changes he will make with the store itself.
Changes in the Business Model
If the buyer is planning on making any dramatic changes in the business model it could be very beneficial for him or her to get those changes on paper and run them past the selling party. The previous owners of the company may have some additional insight that could add value or a new perspective to the ideas of the buyer.
During the transition the buyer will need to outline the goals and the plans that will ensure the goals’ success. These will need to outlined in detail to help the buyer and management team stay on track and avoid getting caught up with the unimportant details of the day-to-day busy-work.
Once the buyer has this plan outlined and reviewed it is much easier to determine how profitable the organization can become as well as avoid paying much more than the business is worth to that individual buyer. If you need professionals to review your business plan, or if you would like Deal Capital’s professionals to assist you in the development your business plan contact us for more details on how we can assist you.