Why Deals Fall Apart
Much of the company search process is about failure; deals will fall apart, and the more you understand why, the better prepared you will be to recognize the warning signs, anticipate them, and even avoid…
Wearing the Coat
Being a CEO early in your career is the most significant benefit of the search process. However, the reality of taking over the reins of an established business may not live up to your imagined…
Customer Concentration
How much customer concentration is too much? Less than you might think! For a searcher, the best-laid plans to acquire a business with low customer and market concentration, recurring revenues, healthy margins, and industry tail…
IT Systems
When you take the CEO position of the business you purchase, you are likely to find inadequate and antiquated IT systems supporting the business. After all, you have purchased a “good” business and a “great”…
Cost of Searching
One of the key decisions in buying a business is how to pay your bills while you are searching for it. You will have search expenses, living expenses and perhaps some substantial personal debt to…
When to Stop Searching
No searcher wants to be a quitter, especially after “sacrificing” so much to head down the path to become a CEO. However, it is important to assess your progress, the impact you are having on…
Knowing Your Competition
Once you have purchased a business, get a solid understanding of how your competition thinks and behaves. Doing so will be critical to developing your strategy and tactics for profitable growth. It is often too…
Practice and Repetition
Search cannot be mastered in a classroom, gleaned from cases histories, found on bookshelves or even in blogposts like this one. Instead, searchers must suffer through “rookie mistakes”, work outside of your comfort zone, get…
Quality of Earnings
During the final stage of your search, while under LOI, you will need to verify what the seller has provided as to their financial health. This level of accounting diligence is best done by an…
Compensation
During your search, and once you are operating the business you have purchased, you should be “reasonably” compensated for your efforts. Certainly, not at the highest level of your friends in other careers, but enough…
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