Quote:
Originally Posted by KTrain
Just to cover off everyone's responses: Thank you!
I'm going to treat all the questions as rhetorical for now, since I shouldn't really go into details of the business or sale here. However, there are some great questions to ask myself, partners and the current business owners.
Keep them coming. When/if the sale goes through, I'll come back and answer what I can.
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I can appreciate the position you're with being unable to disclose much.
I, however, am not in such a position and can share a few more details about my situation which may have some relevance to the business you're looking at.
One of my business partners was a founder at a relatively successful software company. He parachuted out after about 5 years and that was about 3 years before the company was bought out by one of the industry majors (he still kicks himself over the missed payday!). But the fact is, he still knows the business and a lot of the players. Not only do you need to know about the current employees that are planning on leaving, but it would be immensely beneficial to know about any key players that have already left the company and even better if you can find out what they're up to now.
Similarly, do you know what else is happening in the industry? Who are the major players and what are they doing? Are the big guys gaining market share by buying out the smaller guys? Are they simply rolling over the smaller guys that end up closing up? Or, are they moving away from this space, which would tell you the opportunity for this market might not have as bright of a future as you'd like. Might you get "Amazon'd"?
And then there's the question of why you'd
need to buy this company. As I said, my business partner already had relationships with many of the other players in the space. We became partners when another junior player in the same space approached him about buying them out. We both have a solid understanding of the market, the business and the growth opportunities and the company that was for sale was a decent opportunity, but when I asked the opinion of people I respect & trust, they all came back with the same question - "Do you really need to buy these guys, or can you just build it yourself?"
Is that an option for you? Is there anything incredibly unique about this company that you couldn't recreate yourself?
From my experience, those would be two major concerns... Who's out there that could potentially beat you / crush you / out-manoeuvre you & do you really need to buy this company to operate and be competitive in this business?
FWIW, we passed on the opportunity to buy the company that was for sale. It cost us an extra 8 months or so to get to market, but we did so without any baggage with a much better product and were able to self-fund, rather than having to find a way to finance the purchase... The lack of stress from that alone might be worth it.