Here is our simplified guide to buying, each stage in the process of buying a business is just as important as the next and for you to get the desired outcome for your business you need to make sure that you get every element right.
We can help! Find out how we help and guide you through the process here. Also, you might be interested in the range of services we offer and the sectors we specialise in.
Plan to buy and decide what you want
- How can you get to where you’re going if you don’t know where that is? Be specific!
- Too many people make the mistake of saying “lets just see what comes up” and what actually happens is they waste time looking at plenty of businesses that don’t work for them. Decide what the ideal business
looks like based on your own business objectives and go and find it.
Scour the market and find a business that fits
- This is where the guidance and pro-activity of a specialist broker like Prospect Estates will dramatically
improve your chances of success. - Finding genuine sellers in a specific area is difficult at the best of times, using someone with an in depth
understanding of the acquisition market in your sector who knows what sellers want, and therefore how to best represent you, is a must if you’re going to compete with other acquirers to get the best of what’s out there and not just the best of the businesses that the rest didn’t want.
Build rapport and shake hands on a deal
- A lot of people only get to sell a business once in their lifetime, the vendor will want to understand your intentions with regards to their business, their staff and their customers. You need spend time helping them get comfortable with your proposition and where they fit in.
- Once the seller feels comfortable its time to negotiate. Based on your findings, extend an offer subject to due diligence and contracts and aim to get the golden handshake. Get the business o the market before competitors start sniffng around.
Heads of terms
- Heads of terms (HOTs) is a crucial part of the process. A non-legally binding account of the ins and outs of the agreed deal.
- HOTs will help you avoid any outfall of potential misunderstanding further down the line and as such will save you wasting time and money on a deal that doesn’t come together.
- HOTs can be very costly if you go to your local solicitor, at Prospect Estates we produced HOTs hundreds of times and we will draft them bespoke to you deal at no extra cost to you.
Due diligence (DD)
- Time to get under the bonnet – Do your digging and check the pulse of the company that you’re buying.
- We have template due diligence check lists that will point you in the right direction of where to look.
- You may also decide to involve a solicitor at this stage in the process. We can introduce you to one of our partner legal firms who will make sure you don’t miss anything in due diligence and can make sure you’re protected.
Produce a business purchase agreement
- We don’t recommend anyone gives this a go themselves.
- Instruct a solicitor to produce a purchase agreement that is in keeping with the heads of terms.
Completion
- Sign on the dotted line and role yourselves up.
- Enjoy the new profits!
- Make the most of a proper handover from the vendor and re-assure sta and customers.
- Payment is due to the seller on completion and the business is yours from that point on.
Sounds simple right, in truth, it’s far from it
If you are interested in acquiring but you’re struggling with any part of the process or just don’t know where to start, then just get in touch.
