WHY START FROM SCRATCH WHEN YOU CAN BUY YOUR OWN COMPANY?

10 TIPS FOR SEARCHING THE PERFECT TARGET

#1 FIRST LOOK AROUND IN YOUR OWN NETWORK (FAMILY, FRIENDS, ACQUAINTANCES, …).

Nothing better to have a privileged access and be the first to talk to a potential seller about a possible acquisition. Being introduced to a seller by a friend or family member is a plus.

#2 NETWORK, NETWORK, NETWORK! MAKE SURE EVERYBODY KNOWS YOU ARE LOOKING TO BUY A COMPANY.

The more people you reach, the higher the chances of a high-quality deal flow.

#3 GO AND SEE LOCAL ACCOUNTANTS. EVERY ACCOUNTANT HAS AT LEAST ONE CUSTOMER WHO IS THINKING OF SELLING HIS/HER COMPANY.

Make sure you promise the accountant that you will keep on using his/her services in the event of a takeover. Otherwise, he/she will not be tempted to make the introductions you want.

#4 IDEALLY, STAY IN YOUR AREA OF EXPERTISE.

You know the industry, the market, the players, … and most importantly, you understand the business and its drivers.You will be taken more seriously by any seller if you know the business.

Every seller will appreciate some passion for the business.

Only numbers are not enough. Therefore, focus on the business during the first conversations and less on the numbers.

#5 MAKE SURE YOU ALSO HAVE A PASSION FOR THE BUSINESS, ULTIMATELY BALANCING PASSION AND EXPERIENCE.

Every seller will appreciate (to a certain extent) that you are interested in his/her company and his/her business. Sometimes you can even trigger a sales process.

#6 IN YOUR SEARCH, DO NOT HESITATE TO PROACTIVELY APPROACH A COMPANY IF YOU ARE GENUINELY INTERESTED.

In order to purchase a company, you have to look at many companies and have a lot of meetings. It is a very time-consuming job, where availability on short notice is key.

#7 MAKE SURE YOU HAVE SUFFICIENT TIME AND DEDICATION. SEARCHING IS ALMOST A FULL-TIME JOB!

People with the relevant industry experience (‘industry experts’) can help you to direct your search. And the same people can help you in the strategic and commercial due diligence process.

#8 DURING YOUR SEARCH, MAKE SURE YOU ARE SURROUNDED BY THE RIGHT ADVISORS.

Some sellers are not always ready to sell. They determine the pace. Not you, the buyer.

#9 SEARCHING IS A LONG TERM ACTIVITY. AN AVERAGE SEARCH CAN TAKE 18 TO 24 MONTHS. BE PATIENT IN YOUR SEARCH!

#10 THE SEARCHING PROCESS IS A FUNNEL. YOU HAVE TO LOOK AT MANY OPPORTUNITIES IN ORDER TO FIND THE RIGHT ONE.

The average hit rate is 1 in 30. It is therefore key to get a good deal flow going. Also, practice makes perfect. The more transactions you look at, the better you will become in searching and analysing possible targets.

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