Business Acquisition
Strategic Consulting
Embarking on the journey to purchase a business is one of the most significant decisions you’ll ever make. The stakes are high, and the path is filled with opportunities—and potential pitfalls.
Whether you’re a seasoned entrepreneur or a first-time buyer, the right strategic guidance can be the difference between success and setback. Braided Cord Consultancy is here to empower you with the insights, strategies, and tools you need to navigate this complex process with confidence.
1. Identify Your Starting Point:
The approach to business acquisition varies depending on your circumstances: whether you already own a business and are pursuing a strategic acquisition or merger, are an employee within the business you wish to purchase, are a relative of the current owner, or are a complete outsider to the business you wish to acquire.
2. Build the Team:
Business acquisition is a team sport – we will leverage the professional expertise of an accountant and attorney at the right time. This is crucial for proper planning.
3. Preliminary Discussions and Confidentiality:
Both parties explore the potential transaction without committing to any decisions prematurely. These discussions help you assess the business’s culture and establish trust with the seller. Confidentiality is equally important during this phase. You may not want the business’s employees to know of the potential sale at this juncture. A Letter of Intent (LOI) with confidentiality provisions or a Confidentiality and Non-Disclosure Agreement (CNDA) may be drafted by legal counsel to move to the next phase.
4. Due Diligence:
This is a detailed and comprehensive step that includes legal and regulatory, financial, operational, market and industry, and strategic considerations. The financial component will include a complete review of the target business’s financials.
This includes analyzing financial statements, such as balance sheets, income statements, and cash flow statements, to assess the company’s profitability, liquidity, leverage, and overall financial health.
5. Purchase Price:
This may be one of the biggest purchases you’ll ever make. An objective assessment to ensure you’re not overpaying is important to secure financing and ensure a smooth acquisition. A Cash Flow Method is used with a three-year historical financial review and a one-year pro forma projection included. Depending on the need, engagements for a Calculation of Value (estimate of value) or Business Valuation (opinion of value) are available.
6. Negotiate:
Aim high, be persistent, and know when to compromise. All the hard work in due diligence and determining a purchase price goes into either an LOI or a formal purchase agreement. A purchase agreement will be extremely detailed and requires careful consideration.
7. Obtain Financing:
Braided Cord Consultancy offers a comprehensive Commercial Loan Broker Service to assist you with this process.
8. Close the Deal:
Congratulations! You’re now the captain of the ship. What’s next? It can be lonely at the top and difficult to know if you’re making the best decisions for the financial future of your business. Post-close monthly strategic financial consulting is available.
"I’ve had the pleasure of working with Josh in several capacities for more than 5 years. His work ethic and passion for improving businesses has helped us in many ways and positioned us for the future. Josh will be someone we will go to for projects in the future as well and we can’t recommend him enough."
Mike Kasecamp,
