Mergers and acquisitions play an important role in the global economy. And while many people associate M&A with publicly held or large privately held companies, small businesses are also included in these transactions.
I target small to medium size businesses. More than seven million entrepreneurs in North America and the UK start new businesses every year. According to Michael Gerber of E-Myth, 96% of these businesses will fail inside of 10 years.
Most business owners exit their businesses via a sale, either to a competitor, a new market entrant, a financial buyer or an individual or individuals, either inside the business already or external.
Acquiring a business is a much smarter way for entrepreneurs to become business owners. It is easier and less expensive to acquire an existing business, that someone else has built for you and now wants to sell. That business will already have employees, products and services, assets, cash flow, credit, customers, suppliers, partners, and a market reputation. You may require some personal capital to acquire the business, however most the purchase cost can be funded using other people’s capital, using the business assets and cash flows as leverage and security.
The strategies I use, work worldwide and have been used in Canada, the UK, USA, and Singapore allowing me to acquire established businesses worth from 500k to 10 million for little or no upfront capital – without borrowing or debt. An understanding of the seller’s motivations that might be more valuable to them than money. An in-depth understanding of the seller’s motivations is far more important to focus your energy on than the asking price.
David Wedemire
Acquisitions Enterpreneur