To take over a business is the other way to become an entrepreneur. It appeals to entrepreneurs who do not want to start from scratch in their business plans. This approach offers the buyer the comfort of accompanying the seller before the transfer is finalized. A successful takeover requires a solid organization, a well-defined project and patience. Here are some tips for future buyers.
1/ Be patient and save time for your business takeover project
Be patient and clear the time for your pFind and take over a business takes time! Between 12 and 18 months on average in an attractive economic context. In a crisis situation, this period may be longer. Buying a business requires a real investment, certainly in money, but especially in time. Patience is the mother of virtues. Without haste, you will have time to fine-tune your takeover project, and even to rectify it. business takeover project.
2/ Start by analyzing the market for companies for sale
Before you go head-to-head on a specific market, study it! A global diagnosis of the target market is recommended, to ensure that it is a promising market and that the opportunity identified is attractive.
This study will allow you to progress more serenely in the elaboration of your recovery project and in your negotiation. On the contrary, it can also warn about a bleak sector of activity, and bring about future changes in a market. In both cases, the market research will feed your strategic thinking about the proposed acquisition.
3/ Show your willingness to buy a business
To provoke the meeting with business opportunities for sale, do not hesitate to communicate your ambitions. Activate your networks, take part in fairs and other events, get closer to an CCI,…
The transfer of a business is also a strategic step for the seller. As for 9 out of 10 people, it will go through the web to gather information. Therefore, it is important to give your project “digital” visibility. Create an accurate and detailed profile on the Joinzee Entrepreneur Connect platform. It will allow you to be easily identified by potential sellers, thanks to the search engine, based on precise criteria.
4/ Training to take over a business
The takeover is not an insignificant exercise. Contrary to starting a business, where, at your own pace, you’ll learn by trial and error. Taking over a company in business does not allow much approximation. Private and public bodies, such as the CCIs, offer assistance for the creation and takeover of companies and training in business acquisition and management. However, knowledge of the sector of activity remains an appreciated prerequisite, whether for a purchase of business assets, the sale of an industrial company, a service company or the purchase of a start-up.
Transferors are increasingly opting for longer transition periods. The acquirer then becomes associated with the time to be trained and operational in his new position. He will be alone with the joysticks once the transmission is finalised.
5/ Define the priority criteria that will guide your search
Identify the essential criteria for your proposed takeover, so that you don’t spread out. These filtering parameters will help you evaluate the conformity of opportunities with your entrepreneurial project: sector of activity, size of the company, price of the company, localization, stage of development,…
Be careful, however, not to restrict your search criteria too much, at the risk of missing great opportunities.
6/ Make sure you’re a perfect candidate for the transfer
A crucial criterion for the success of a transmission is the adequacy of the candidate’s profile with the company project. Find out about the current leader, his past, the direction he has given to his entrepreneurial project, and the values he has instilled. This will give you an idea of the quality of your application, in response to expectations.
To facilitate this work, the Joinzee platform offers cedants the opportunity to detail their planned divestiture. In this way, the candidate will be able to ensure that he/she has the skills, knowledge and qualities expected, and find a company to be acquired that matches his/her aspirations.
7/ Don’t miss your chance to make a good first impression with the seller
The first meeting with the seller, like the takeover project, is a question of relationality and psychology. So prepare your presentation interviews and show that your project and application are solid. Very often, the seller is concerned about the sustainability of his company, which he may have founded himself. To convince him of your ability to take over a business, you will have to reassure and seduce him.
8/ Know how to be accompanied, and avoid haste
Taking over a business is a new challenge for you? You probably have to navigate in turbulent waters, drowned in doubts and questions. Accountants, financial, patrimonial, tax, managerial,… The fields of expertise involved in the sale and purchase of companies are numerous.
The result depends on the preparation. Allow sufficient time to select competent advisors who will accompany you through the process of divestiture-transmission or merger-acquisition. You will then have plenty of time to study each project, relying on the expertise of these specialists in business acquisition.
This network of experts around you will also act as a safeguard, and can save you from being “inflamed” for a project of love at first sight.
9/ Set your maximum price before you negotiate
Above all, the entrepreneur is an excellent manager. And this must be reflected from the very beginning of the search process for a company to be acquired. Set a budget that you don’t want to exceed. Otherwise, you may have difficulty completing your project. This budget is broken down into an amount allocated to the purchase of the company and a safety margin, to anticipate any unforeseen circumstances. Of course, this budget is at the confluence of the financial needs of the recovery plan and your financing capacity. This budget definition is also an anchor when you enter the negotiation.
10/Build your forecast and recovery plan correctly
As in the case of a company creation, the business plan is a key step to take over a company. This includes proof that you will be able to make the transition, that your strategic direction is relevant and achievable, and that your financial package is consistent with the recovery plan.
11/ Take it easy, especially in the first few days
Although at the head of the company, you’re the “new kid”. Even if your new collaborators save a hazing, you will have to show them your involvement in the transmission project.
First, in the strategy, by presenting them with your development plan. Then, in the field, by not sparing your efforts, with employees and external relations (clients and suppliers). The aim is to lay the foundations for a relationship of trust.
12/ Plan a time for the company’s transmission, a period of adaptation and discovery
The change of management is a difficult period for the employees, who could be attached to the seller. The transition is therefore strategic to maintain the motivation and involvement of employees in the company’s project. The lines of work are quite simple: pedagogy, transparency and benevolence!
To effectively manage the transition with staff, and to understand the operational aspect of management effectively, it is common for the seller and purchaser to co-lead the business for a few months to several years. The longer the transition, the smoother it is for employees.
Taking over a company also means selling the customer portfolio. It is common for clients to be attached to the seller’s personality. It will therefore be a joint effort of the partners (editor/acquirer) to convince them of the benefits of continuing the relationship.
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