How to do M&A (analysis) on deals?
August 11, 2023
by a searcher from Georgetown University - The McDonough School of Business in Washington, DC, USA
I have no experience in M&A. What do you look for? What is the process you undergo to see if it is a good business? Any resources shared would be helpful as well.
from Texas Tech University in 2400 Aviation Dr, DFW Airport, TX 75261, USA
But to start,
1. Will the business make enough money to pay you, pay for itself, and still have some left over to grow?
After that,
2. Does this business check all your boxes? Your experience, your passions/hobbies, your desired lifestyle, location, employees needed, etc.
The above are your "Acquisition Criteria."
Then you should find someone that knows the rest of the process to help you through it. That person may be a consultant, or a good broker. There are also programs and groups you can pay to join teaching these things.
My advice is to make sure that in addition to any brokers and consultants, you use your own CPA and Attorney to review everything. But all of these people cost money, so they are to be engaged after you find something meeting and satisfying your acquisition criteria. [Later in that process.]
in United States
Generally speaking, you’ll want to start with the cash flows of the business. Then you’ll use that to think about the returns you’ll need to make an investment. But there is so much more to think about that you’ll want to start reading some books. Maybe HBR Guide to Buying a Small Business: Think Big, Buy Small, Own Your Own Company (HBR Guide Series) https://a.co/d/gtMBcJf.
Good luck!