Business Acquisition
Buying a Business

Small Business Acquisition

 Acquiring a business is a great way to begin a business without having to go through a messy start-up phase of building a business yourself. Doing this has many Pros, but it is important to do it rigt, as there can be many consequences along the way. In fact, only a small percentage of people who attempt to buy a business succeed in doing so!

Buying a business should be taken in steps, and don't try to rush through the procedures, it is very important to take this methodically.

First of all, you have to decide yourself wether you want to aquire the business, try to make a list of criteria of what you want, and compare it with what the business offers. For example, if you own a candy franchise, it wouldn't be worth the time and money to buy a little corner venue in the middle of nowhere.

Next, DO YOUR RESEARCH!! It is very important that you get an idea of how the business operated before it went up for sale. Look up everything, from spread sheets, to the salaries, to the tax reports. It wouldn't hurt to ask the IRS if that business has had any tax trouble in the past, you don't want to buy a company and off the bat have to pay the previous owners debts. Also, clear up ANY problems you might see on the contracts. Ignoring any questions you have, or misstatements you see will bite you in the butt when you close the deal. Talk with the previous owner through the whole contract if you have to, this is your livelihood you will be buying, remember?

Next, try to estimate the business' value. Should you devote your entire income on what could be a cash cow, or a giant money hole? Using the "Seller's Discretionary Cash Flow"(SDCF) is a good way to value the company, including profits, salaries, depreciation, interest expense, and any perks the company might have (maybe the papermill you intend to buy owns its own lumber yard?).

Now it's time to begin the negotiations. This would be a good time to bring in Race Rock Capital. We're experts at handling the negotiations and examining the contracts. We will negotiate them for you and clear up any last concerns you might have about the contract.

Race Rock Capital
12 Roosevelt Avenue
2nd Floor
Mystic, CT 06355

Phone: 860-536-6715
Fax: 860-572-6001


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Mergers and Acquisitions Advisory Firm: matching qualified business buyers to sellers of privately held companies