How to Identify Acquisition Targets?
One part of competitive growth strategy is acquisition. Some key questions to ask during the process of taking a company to a higher level include:
a. Who are your industry competitors?
b. Who are your vendors that can be absorbed to drive up the bottom line and profitability?
c. Are there new entrants into the industry or market that could complement or improve your business?
d. Engage an Investment Banker or M&A Broker to help you identify acquisition targets
Another question that we routinely encounter is whether capital is required for business acquisitions.
Cash is always king in a purchase and sale transaction. However, many businesses can be acquired through other means. You will be surprised at how many sellers would be willing to provide financing needed with very little upfront cash investment. Many entrepreneurs reach a point of where the business is no longer their priority or a more attractive opportunity has arisen. Earn outs is another attractive payment plan, where it allows the buyer to pay part of the purchase price based on the business meeting certain financial performance goals or other criteria over defined periods of time after the acquisition is complete.