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Finding the Right Business to Buy.

How does one go about finding the right business to buy? This is one of the most often asked questions, and there are probably as many approaches to finding the answer as there are people asking the question.While it might appear simplistic, try asking yourself the following to begin formulating your answer.

1. Industry
   
   • What is the industry and market that you want to play in? The more specific you are, the more focused and manageable your identified opportunities will be.
   • What are the trade organizations for the selected industries and markets? Most industries have periodic trade shows where companies at all stages in the industry show their wares. Go to a few to get a feel for the state of that industry.
2. Capital Requirements
   
   • Know what funds you have available from both debt and equity sources.
3. Company Stage
   • What stage in the business life cycle is most desirable for the person doing the acquiring on the continuum from concept/pre-revenue to early revenue to mature … and all stages in between?
4. People
   
   • Do you want to run the business or just be an active investor?
   • How important is it to you to keep the existing management after the transaction is complete?

With this basic information in hand, you are ready to start approaching the appropriate entities in your area to both network with “deal” people as well as with folks active in your space. For example, the Association for Corporate Growth is focused on middle market deals and deal makers. Find your local chapter, and attend a few of their meetings.

There is also an organization in Chicago called the Illinois Technology Development Alliance (ITDA). This organization delivers commercialization services to entrepreneurs who have innovative ideas, inventions and intellectual property that can be developed into scalable technology businesses. One service this organization offers is a Monday morning meeting where companies, typically three per meeting, highlight their business and/or products, make a pitch for capital and get feedback on their plans.

In addition, many universities have “incubators” that are looking to match ideas with people who can commercialize the ideas.

In summary, there are many paths to finding the right business. Start by defining what you want and roll from there.

And Jennifer, let us know how you are doing in your quest.

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.