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TAKE OVER OPTIONS

The subject of take overs occurs to expanding business on several totally separate issues;

• buying an established business to start your venture this saving the costs, time and risks of starting your own.

  • if the purchase is a good, growing business it may be costly, typically 5-10 years profits, more if expansion is rapid.

  • bargains can be had if a sale of a viable business is due to retirement, ill health or bad management.

• buying a business to expand, where your own venture is doing well and making good profits.

  • similar to the above options, but you may be in a stronger position if your own business is doing well. You may want, or have the opportunity to take over say an ailing competitor.

  • raising capital to take over another business in the same profession or trade may make good investment sense and making borrowing or bringing in new investors an attractive deal.

• being taken over as your business is doing well and has attracted the attention of competitors to whom you are a potential nuisance, or an investor who sees you are onto a good thing.

  • if you do not want to sell then the price can well be forced up by anxious bidders to a price you cannot afford to turn down.

  • selling out can create opportunities to retire, or set up a new business providing more challenges.

  • check with your accountant the tax implications both short and long term otherwise you could end up loosing a large chunk of your sale price in tax.

• merging - your business with another firm to expand, with joint benefits.

  • usually a clash of leadership can create problems and, although seen as a merger usually one firm takes over or dominates the other.

  • ideally each owner should have clear responsibilities to control, so that the joint organisation can really benefit from a well thought out and managed merger.

  • ensure all new owners of the joint venture are happy with their stake and status, people who reluctantly accept deals are rarely happy and this reflects on the efficiency of the new business.

• retiring and let other members of your family or employees take over your business, with perhaps you being retained as a "consultant" with a minor shareholding.

  • when retiring it is better to be out of the companies future management, however several firms have brought back former owners when new management runs into problems and lack the creative spark of their former leader.

  • dominant owners of successful companies frequently "groom" their successors for some years before retiring as they often want to see their "baby" in good hands. Or comparing a father wanting their daughter to mary a good and "suitable" husband!!

  • retirement is bound to leave you still interested in your old companies future, but a good pension and perhaps a capital sum, coupled with a useful investment still in your former company still gives a happy and contented retirement. Breezing in a few times a year to a Directors meeting from your retirement pad abroad is perhaps many business owners dream.

Useful web sites

Desjardins - Buy or take over a business Buy or take over a business. Buy or take over a business. You'd like to acquire a business and have many questions requiring clear, comprehensive answers.

Please feel free to Contact Us with questions or to give us information to add to our knowledge base.