Pursuing quality companies to purchase is very competitive.
Whether you are a once-in-a-lifetime business buyer or a
seasoned business buyer, you are ultimately trying to find a
viable company to purchase that has little or no purchase
competition. Although having many purchase suitors is great for
the business seller, it can result in many unnecessary hassles
for the potential business buyers.
Responding to published business-for-sale listings and
contacting merger and acquisition intermediaries can be
somewhat fruitful for the proactive business buyer. However,
the proven belief among merger and acquisition industry leaders
is that the most viable acquisition candidates are typically,
at least “officially”, not for sale.
Because a company is not for sale does not mean it cannot be
bought. There can be many valid reasons why a business owner
chooses not to put his company up for sale, least of which is
it takes a lot of time, company resources and extraordinary
effort to strategically position a company to garner the
highest purchase price possible. This is not unlike the work
required to get your house ready to sell, it’s a work intensive
commitment and you must have a compelling reason to make the
decision to sell.
Sometimes You Got to “Get Creative” to Find Companies to Buy
Besides clearly understanding and committing to your critical
business purchase criteria, a savvy business buyer needs to
sometimes deviate from their well thought out acquisition
purchase plan to find the next “great deal”. A business buyer
must be creative, define acquisition candidates from
extraordinary perspectives to ultimately position themselves as
an exclusive purchaser of a viable company.
One of the most innovative perspectives applied by veteran
business buyers is to define acquisition candidates based on
systematic evaluation of macro and micro technological tends.
(“Macro” meaning technology that influences many companies or
people, “Micro” meaning technology advancements that influences
one company or person). How this leads to defining a great
company to buy is a systematic, iterative process for the
business buyer.
Trend Based Company Searches
There is a logical eight step process to defining viable
acquisition candidates based on macro and micro technology
trends. Each technology trend you define, whether it affects
the potential growth of many companies, (macro) or just one
company, (micro) has to be evaluated on its own merits. The
importance of this article, to you the business buyer, is that
there is a creative way, a nontraditional way, to define viable
acquisition candidates and it requires a step by step process
to get you the desired results:
Step #1: Define Macro Trends/ Causes for Market Changes
* Political or Legislative
* Technological
* Demographic
* Economic
* Social
* Religious or Cultural
Step #2: Define Macro Technology Trends/ Causes for Market
Changes
* Developments from Science
* Developments in Communication
* Developments in Engineering (applications of science)
* Developments in Commerce
Step #3: Define and Understand the Applications of New
Technologies
* Define existing product or service applications of current
technologies
* Define new product or service applications using new
technologies
* Focus on defining “first” applications of new technologies,
(no matter the market)
Step #4: Define Current “Product Conversions” Resulting from
New Technologies
* Advances in manufactured products related to material content
improvements (metal to plastic, organic to synthetic, plastic
to composite)
* Advances in manufactured products related to improvements in
manufacturing processes (Cost control, throughput, parts
consolidation)
* Advances in services because of improvements in products
noted above
* Again, focus on defining “first” applications of new
technologies
Step #5: Define the Markets or Industries Most Affected by a
New Technology
* Classify markets by end users that are starting to use the
new technology
* Classify markets by end users who NEED the new technology
* Classify markets by end users who don’t yet know they need
the technology
* Classify and prioritize same markets by revenue potential and
geography
Step #6: Define Companies within the New Technology
Application Markets
* Established service providers
* Established manufacturers
* “New” market entries
Step #7: Research, Qualify and Approach Companies for
Purchase
* Define, qualify and approach ALL the companies in the market
niche?
* Define, qualify and approach specific companies in the market
niche?
Step #8: Pursue Companies that will discuss Their Acquisition
Candidacy
It is important to emphasize that some of the greatest business
opportunities lie in application of new technologies in
different products or services, in different markets, in
different geographies other than where they first were applied.
Add this approach, this perspective, to your business buying
process repertoire. It could give you the margin of victory
necessary to find and eventually secure a business acquisition
that you may have never discovered otherwise.
About the Author:
Mark Smock is President of
, the
FIRST international business buyer directory of its kind.
Business Buyer Directory provides a non-traditional means for
proactive business buyers to locate businesses for sale
worldwide that meet their exact registered purchase criteria.
