Pursuing quality companies to purchase is very competitive. Whether you are a once-in-a-lifetime business buyer or a seasoned business buyer, you are ultimately trying to find a viable company to purchase that has little or no purchase competition. Although having many purchase suitors is great for the business seller, it can result in many unnecessary hassles for the potential business buyers. Responding to published business-for-sale listings and contacting merger and acquisition intermediaries can be somewhat fruitful for the proactive business buyer. However, the proven belief among merger and acquisition industry leaders is that the most viable acquisition candidates are typically, at least officially, not for sale. Because a company is not for sale does not mean it cannot be bought. There can be many valid reasons why a business owner chooses not to put his company up for sale, least of which is it takes a lot of time, company resources and extraordinary effort to strategically position a company to garner the highest purchase price possible. This is not unlike the work required to get your house ready to sell, its a work intensive commitment and you must have a compelling reason to make the decision to sell. Sometimes You Got to Get Creative to Find Companies to Buy Besides clearly understanding and committing to your critical business purchase criteria, a savvy business buyer needs to sometimes deviate from their well thought out acquisition purchase plan to find the next great deal. A business buyer must be creative, define acquisition candidates from extraordinary perspectives to ultimately position themselves as an exclusive purchaser of a viable company. One of the most innovative perspectives applied by veteran business buyers is to define acquisition candidates based on systematic evaluation of macro and micro technological tends. (Macro meaning technology that influences many companies or people, Micro meaning technology advancements that influences one company or person). How this leads to defining a great company to buy is a systematic, iterative process for the business buyer. Trend Based Company Searches There is a logical eight step process to defining viable acquisition candidates based on macro and micro technology trends. Each technology trend you define, whether it affects the potential growth of many companies, (macro) or just one company, (micro) has to be evaluated on its own merits. The importance of this article, to you the business buyer, is that there is a creative way, a nontraditional way, to define viable acquisition candidates and it requires a step by step process to get you the desired results: Step #1: Define Macro Trends/ Causes for Market Changes * Political or Legislative * Technological * Demographic * Economic * Social * Religious or Cultural Step #2: Define Macro Technology Trends/ Causes for Market Changes * Developments from Science * Developments in Communication * Developments in Engineering (applications of science) * Developments in Commerce Step #3: Define and Understand the Applications of New Technologies * Define existing product or service applications of current technologies * Define new product or service applications using new technologies * Focus on defining first applications of new technologies, (no matter the market) Step #4: Define Current Product Conversions Resulting from New Technologies * Advances in manufactured products related to material content improvements (metal to plastic, organic to synthetic, plastic to composite) * Advances in manufactured products related to improvements in manufacturing processes (Cost control, throughput, parts consolidation) * Advances in services because of improvements in products noted above * Again, focus on defining first applications of new technologies Step #5: Define the Markets or Industries Most Affected by a New Technology * Classify markets by end users that are starting to use the new technology * Classify markets by end users who NEED the new technology * Classify markets by end users who dont yet know they need the technology * Classify and prioritize same markets by revenue potential and geography Step #6: Define Companies within the New Technology Application Markets * Established service providers * Established manufacturers * New market entries Step #7: Research, Qualify and Approach Companies for Purchase * Define, qualify and approach ALL the companies in the market niche? * Define, qualify and approach specific companies in the market niche? Step #8: Pursue Companies that will discuss Their Acquisition Candidacy It is important to emphasize that some of the greatest business opportunities lie in application of new technologies in different products or services, in different markets, in different geographies other than where they first were applied. Add this approach, this perspective, to your business buying process repertoire. It could give you the margin of victory necessary to find and eventually secure a business acquisition that you may have never discovered otherwise. |
