What are the essential steps before buying a business ?

On average, the purchase of a company takes between 12 and 18 months, from its preparation for its finalization. The resumption of activity is nevertheless very popular with entrepreneurs, because it allows you to immediately benefit from an infrastructure and a market. The buyer must only work his approach to succeed in identifying and acquiring a company with high potential.

He also needs to be accompanied to avoid poor choices.

The essential steps before the purchase of a company

Project leaders must follow several essential steps before buying a business, According to support organizations like Bpifrance. These approaches in particular cover the legal and financial part. They also include technical procedures such as gauging the dimensions of the interior of a building. In details, the purchase generally takes place in seven main stages:

Preparation of the business purchase project

The step is essentially Mount the business takeover project and to define the main objectives of the operation. Depending on the case, the contractor can for example aim for the development of skills, the promotion of a region, the growth of new markets … He will then be able to accelerate and follow the development of the project.

Target establishment search

Once the project has been defined, the future buyer can already have an idea of the companies that can correspond to its objectives. This approach will also allow set the limits of his personal investment or financial in the project. That said, research above all improves how to approach targets.

Discussions with the operators concerned

Like an activity creation, the success of a company resumption is based on the solidity of the project and the entrepreneurial persuasion capacity. This latter will have to convince the managers of the target company this time and any purchase funders. In both cases, he will have to demonstrate why these operators should help him make this acquisition.

Drafting of purchasing intention

There Letter of Intent or law (Letter of Intent) designates a pre -contractual document guaranteeing the acquisition of the company under the conditions provided. This first formalization thus encourages the two parties to respect the commitments made during preliminary discussions. In addition, it makes it possible to structure negotiations.

Creation of the acquisition audit

I’Acquisition audit is among the essential steps before buying a business. It is used to study the target structure in its financial, legal, tax, social, environmental, logistics, etc. In this way, the offer can be adjusted according to the particularities of the establishment in question.

Negotiation of an asset and liabilities guarantee

GAP (asset and liabilities warranty) is essential during the purchase of a company. She allows to pay for the real value of the company. Concretely, the document provides for the necessary financial compensation in the event of a difference between the real assets and the declaration of the seller.

It is the same for the liabilities.

Formalization of the transfer act

I’stopping act (closing) represents the end of negotiations and the registration of agreements between the parties. It is used to take up and detail the terms of the company’s sale. The seller and the buyer will have to make the transfer of securities in the meantime.

The act is also supposed to contain the conditions precedent of the two signatories.

How to surround yourself well and equip ?

The creation of an expert team is also one of the essential steps before buying a business. Indeed, the acquisition of a society can sometimes be complex due to the situation of the structure envisaged. It is therefore necessary to surround yourself with professionals specializing in mergers and acquisitions.

Likewise, the future buyer needs equipment adapted to his project (measuring devices, detectors, scanners, heavy tools, etc.).

Concretely, the entrepreneur must find reliable guides To help him in the choice and approach of his interlocutors. He will also be required to carry out certain steps in order to obtain the labels required to be a green or socially responsible company. In these cases, the new management will have to comply with specific infrastructure and equipment rules.