Why should I want to buy a business? - CORE
Motivation in the sale of a company-Clear your WHY

Why should I want to buy a company?

As the number of takeover-ready companies increases, other groups of acquirers are increasingly coming into focus. These groups usually have a wide range of experience and competencies, but are often less experienced in the acquisition process. Regardless of the transaction form chosen, this group of buyers should be able to answer the question "Why do I want to buy a company? KERN - Unternehmensnachfolge, has dealt with the many social and organisational aspects in the run-up to a planned takeover. Three of these are presented below.

What is often underestimated when buying a company?

The complexity of a purchase process is usually not grasped. But a company purchase is a royal class. For example, successful managers have gained valuable experience and success during their employment. Consequently, they project these onto the acquisition process and deduce that they can also manage it well. Likewise, there are acquirers who have a very clear picture of parts of the acquisition process, but do not know where to start.

Where should the preparation for a takeover start?

To avoid costly mistakes and organise a successful takeover, potential acquirers should be able to answer the following questions, among others:

  • Firstly, the question of 'why?

Buying a company is not the goal, but a means to an end. There are many reasons for buying a company: monetary, the desire to be able to shape something independently, creatively, to be able to act independently of higher hierarchies. Therefore, the answer to your individual ?why? must be strong enough to motivate you from the idea of ?buying a company? through the process to full implementation and far beyond, and to defy resistance. Because the second aspect already reflects your motives against your individual possibilities.

  • Secondly, now it's about you. Even if you agree with your family or other relatives that you want to buy a company - at the end of the day, you bear the sole responsibility. Questions like: "What stage of life am I in?", "Can I afford it financially, organisationally, humanly and health-wise?", "How do I deal with uncertainty, stress and risks? In addition to your own professional background, it is incredibly helpful if you yourself already have experience in buying a company or if someone from your circle of friends and acquaintances does. At this point, there cannot be enough questioning.
  • Thirdly: What about the 'salesperson'? What makes up his personality? Asking about the motives for the sale can have a great influence on the purchase price and the negotiation tactics. Does the seller have pressure or other constraints to sell? Or does he just want to test the market value? Does he (k)have an (alternative) successor? Does he give a vendor loan? Which value system does he belong to? How does he manage the employees? The latter has a great influence on how you can take the employees with you on your journey. Along with suppliers and partners of your target company, they belong to the other important stakeholders, to the 'periphery' of the seller.

What should potential acquirers look out for?

Check your motivation comprehensively with many questions and give yourself honest answers. Furthermore, we at KERN ? Business Succession recommends involving an external advisor with transaction and industry experience in your takeover process. This way you can avoid expensive mistakes.

But you ?Why? ? you have to answer that yourself and you will be asked about it again and again, by the banks, by the seller, by your family. The answers to the Why? will be your driving force in the takeover process.

Tips for further reading:

Business sale vs. real estate sale

Advice traps in the process of business succession

The costs of a business succession or an M&A project

How do you recognise a reputable business sale advisor?

Alternatives in transaction negotiations

Business valuation of SMEs

The 5 most important contents of an entrepreneurial emergency kit

What are the reasons for buying a company?

In addition to monetary reasons, the desire for autonomy and independence from hierarchies are the main reasons for buying a company. But also the possibility of being able to shape something independently and creatively is a frequent motivation for succession.

What factors should I consider when buying a business?

First of all, there is one's own personality and situation. After all, you should be able to afford a takeover financially, but also be able to deal with the stress. It is also helpful to have experience with takeovers yourself or in your environment.

What do I have to consider before buying a company from the seller?

On the one hand, they should question the buyer's motives. For example, possible pressure to sell has a great influence on the selling price and tactics in the negotiation. On the other hand, his values and style of leadership are relevant in order to win the employees for the common path.