Guidelines For Investing Or Acquiring A Company

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Every country and states have their business statutes . Make sure you comply with all these statutes in the country or state where your business is registered. Next will be to find out if your business of interest is really of interest to your target.
Note, in case you need to purchase an existing business, you have to keep in mind that the cost mostly depends on the popularity and the financial status of such business. Some of the things that influence the costs include- the size, number of outlets, financial status , and how long the company has been in existence.
In case you want to buy a newly established business, you must check the parent company’s history so as to evaluate its longevity in the particular sector of operation and how the owner(s) have managed the company so far.
Below is how to evaluate the right business opportunity for you
1. Evaluate yourself and your strength: You may have have the financial muscle and not have the managerial ability to manage such business. For example, there is a popular business man in Nigeria , all the companies he buys dies not because he does not have the money, but he lacks ability to manage them. He has invested in the media, aviation, agriculture and they all have the same story.
2. Have a complete knowledge of the product and or services you are offering. If you don’t know, read, do a research, ask questions from people who are already successful in the field. Attend seminars, training , workshops etc as long as it will add to your knowledge of the business and industry.
3. Make sure the timing is right: It is not all products you can introduce at all times, each products has its time and season . For example, the best time to introduce an umbrella if you ask me is during raining season or winter.Not that there is no market for it during summer, but it will make more sales during raining season. By evaluating the market, you will know what product to offer at the right time.
4. Check the training and experience required to run the business properly. Is there a suitable curriculum of training? What is the scope of training? Does your background fit its requirements?
5. What is the company’s profit ratio to sales; to time and service requirements; and to the financial leverage requirements? Can you make more in another type of business?
6. Do you have to work more hours to make the same amount you do now? Can you invest the same amount in the business opportunity yet operate a larger operation and get a better return on investment?
7. Check with current operators to see how they’re making out. Are they happy with their businesses? What problems do they have, if any, that are common to all units sold?
8. Research company’s history. Is it a new firm with little expertise and experience? Is it an older firm whose regular products have satisfied customers for years? Are the business opportunities all offshoots of their regular business?
9. Is there financial strength and strong credit behind the business opportunity? Can the licensor-seller give you an escrow agreement to deliver a building, equipment, leasehold improvements, inventory, etc., as the unit is made ready for your use? Check out the bank references given by the licensor-seller; discuss the company’s financial strength with the appropriate managers.
10. Evaluate the policies and plans of the company with the associations and business groups in which the parent company or seller is involved.
11. The Better Business Bureau will give you a report if others have lodged previous complaints against the company.
12. Having an attorney, accountant or business consultant conduct an in-depth study of the company may be an excellent idea.
13. Visit the headquarters of the licensor-seller. Talk to the personnel and the training director. Visit the original prototype of the business being sold. Evaluate other outlets. Expose yourself to the other outlets’ products and services to determine the quality dispensed.
If you observe the aforementioned points above, you are sure of making a good deal that you will nor regret.

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