Small Business Acquisition Adviser
Buying a Business? Know What You're Really Buying
A set of accounts can tell you a lot about a business. They will not tell you everything.
Michael will help you look at the parts of the business that can become very important once you actually own it: where new business comes from, how much depends on the current owner, what the marketing is really doing and whether there is a sensible opportunity to grow.
The aim is to give you another commercial view of the business before you inherit its problems as well as its opportunities.
The Business May Look Different Once the Owner Leaves
One of the first things Michael will want to understand is how much of the business is really attached to the current owner.
Do customers buy from the company, or do they buy from that person? Who holds the important relationships? Who makes the decisions? Where does the knowledge sit? What happens if the owner disappears on settlement day?
A business can look well established while still relying heavily on one person to keep everything moving.
Michael's existing advisory approach already uses a similar test: if the business cannot work when the director steps away, there is still a lot of dependence sitting inside it.
Where Does New Business Actually Come From?
"Most of our work is word of mouth" can be a good thing.
It can also mean nobody has ever properly worked out why customers arrive, which relationships matter or what would happen if one of those sources disappeared.
Michael will help you look at where enquiries and customers actually come from, how reliable those sources are and whether the business has a repeatable way of bringing in new work.
The question is not just whether leads are coming in today. It is whether you understand enough about where they come from to feel comfortable owning the business tomorrow.
Sources That May Matter
That may include:
Existing customer relationships
Repeat business
Professional relationships
Online search
Paid advertising
The owner's personal network
Sales activity
Partnerships
A small number of large customers
Is the Marketing an Asset or Something You'll Need to Fix?
Some businesses have years of goodwill, a good reputation and a steady flow of customers, but almost no real marketing system behind them.
Others look impressive online but rely heavily on paid advertising that stops producing the moment the spend is reduced.
Michael will help you look at what is actually there.
That can include the website, positioning, search visibility, advertising, customer database, social presence and whether the business has built anything that a new owner can continue using.
You are not trying to judge whether the website is pretty. You are trying to understand whether the marketing helps make the business easier or harder to grow.
Is There Really Growth Potential?
Nearly every business for sale seems to have "significant growth potential".
That does not mean the opportunity is necessarily real.
Michael will help you look at where additional growth could actually come from. There may be an underused service, poor pricing, spare capacity, a market the business has never properly approached or simply marketing that has been neglected.
There may also be very little sensible room to grow without adding a lot more people, cost or complexity.
The useful question is not, "Could this business grow?"
Most businesses probably could.
The better question is, "Where would the growth come from, what would it require, and would it actually improve the result?"
That is consistent with Michael's existing approach of finding the business's unutilised advantage and working out where growth should genuinely come from.
What Are You Actually Buying?
Michael can help you look at questions such as:
How dependent is the business on the current owner?
What happens when that owner leaves?
Where does new business come from?
How concentrated are the customer relationships?
Is the marketing producing anything useful?
Is the business well positioned or difficult to understand?
What parts of the business appear underused?
Where might there be obvious growth opportunities?
What would you probably need to fix first?
Does the business suit how you actually want to spend your time?
This is not about trying to find a reason not to buy the business.
It is about understanding more of what you are taking on before you take it on.
Talk To Michael
If you are considering buying a business and want another commercial set of eyes on it, show Michael what you are looking at. He can help you work through the marketing, owner dependence, lead sources and growth potential before you decide what you think the opportunity is really worth to you.