We recommend that those interested consider carefully the questions below before deciding to opt for M&A:
What are my personal and the company’s objectives?
What is my future expectation regarding sales volume, market share and core business?
Does the company really need financial resources or are there other and more important necessities?
Is the business model that I want to introduce coherent? Can it be easily explained to someone who is not well-acquainted with the business?
Do my company’s products or services which are or will be offered to the clients have a differential value? Does their performance show a relevant rate of increase?
Am I financially and psychologically prepared to assume risks and the management of a new company?
Am I psychologically prepared to have a partner and to give up absolute power over the company? Will the transparency of my management decisions and the distribution of results not cause me discomfort?
What do I expect from a capital injecting partner?- Is my offer something new? Does it already exist in the market? Which are the trends? Have I adequately researched the issue?
Do I have a Business Plan drawn up and ready for presentation to the investors?
Is there already revenue generation? What is the potential market and who are the main competitors?
What scale does my business require? Over which time period?
What are the competitive advantages and what are the barriers for entering or expanding participation in this market?
How much have I already invested in this business? How much time can I still support without additional investments? Will my current partners approve new contributions?
What results have been obtained in the last 3 years? How much has been reinvested in the business? How much has been distributed among the shareholders?
Are there middle or long-term contracts signed with clients?
My desire to sell is motivated by: (a) Poor results of the company/business unit? (b) Need for cash generation? (c) Change of core business? (d) Succession or shareholder problems?
My wish to buy is motivated by: (a) Verticalization? (b) Market share? (c) Competitor elimination? (d) Expansion of production capacity? (e) Diversification
What do I believe is the value of my business? How did I calculate this amount?
