The benefits of valuating a business before buyingJean-Claude Desnoyers
Buying a business is an important transaction in an entrepreneur’s life. A commitment that needs to be calculated and planned. Acquiring a business raises many questions for an entrepreneur: What should my selection criteria be for a company? Which elements should be included in my offer to purchase? As a current business owner, will this new venture create synergies with the one I have? This is my first acquisition, what type of businesses do I have the greatest affinity with and would be the best fit? In what role can I contribute most to the success of the business? Will I stand out as a winner? So many questions but so few answers when we do not know where to find proper advice. Here is how a Chartered Business Valuator (CBV) can help you answer your questions and guide you in this transaction, as a current and future owner of businesses.
How to choose among the offers available on the market?
When you call a CBV in order to acquire a business, you will be asked to provide your business goals. With this information he will be able to identify the types of businesses that offer the maximum synergies with the business you already own. If you don’t already own a business, he will help you identify the type of businesses that you have the greatest affinity with and where your talent, knowledge and network could have the most value. He will take the time to analyze your needs. He will therefore identify offers that might interest you, but also those that are realistic and that will allow you to achieve your business goals.
A Chartered Business Valuator appraises businesses in various fields. He is therefore able to suggest an acquisition that could grow your business. In addition, the information obtained during the valuation allow you to learn more about the strengths and weaknesses of the business you are about to acquire.
How do I submit my offer to purchase?
In such a transaction, you have expectations, and the seller does as well.
Seeking the advice of a Chartered Business Valuator for the acquisition of a new business will allow you to have a clearer picture of the one you wish to purchase. Perhaps you’ll want to make an offer based on specific terms. Your CBV also helps you identify the risks associated with the acquisition of the entity you want. The structure of your offer can then be modified by these risks. To the extent possible, the CBV ensures that your offer is good for you but also for the seller. All this, in order to achieve a win-win transaction.
Will the acquisition of the new business be beneficial for the one I already own?
In analyzing your options, will the most attractive business benefit you and your existing business? If this is your first business, did you determine your entrepreneurial profile?
In the case of a first acquisition, a CBV will identify potential contributions that you will, as a buyer, bring to the business. Discussion about your network, your knowledge in the chosen field and your experience with customers, will allow a CBV to determine the type of business that might interest you. A Chartered Business Valuator will be able to perform some analysis of the business you have within sight. He will ask you the appropriate questions so that you can find a business that may be related to what you already do. Otherwise, he will bring out the strengths and weaknesses of the business to acquire. This way you will know where to focus your efforts when you have taken the reins.
So what are the benefits of dealing with a CBV before buying a business?
Hiring a Chartered Business Valuator for a business acquisition process means guided through the process.
Such a transaction can be stressful, there are many ways to perform an analysis and lots of questions to be asked. As an entrepreneur, you cannot think of everything, all the time. The CBV knows what to assess to help you complete this important transaction. In its field, the CBV knows several experts who can be allies in the financing and realization of your new acquisition. The work of a CBV does not replace the due diligence that has to be done at the time of the transaction, but is part of that due diligence process.
The valuation prior to the acquisition will give you a clear and complete picture of your purchase. Expertise like this is crucial prior to embarking on such an adventure! Do not hesitate to call me, I will be happy to assist you in your acquisition project.
I always aim for a win-win transaction!