Although acquisition is a great way to grow your business, there are a lot of hurdles that people don’t talk about.
Finding the right business for you is extremely difficult.
Deal flow is a lengthy process and deal sourcing can be considered a full time job in itself.
Most sellers have high or even unrealistic expectations as to the final sale price of their business.
You must invest some of your own capital up front. If you fail to do so, most sellers will walk away.
It is extremely rare that you will be able to complete a deal entirely on borrowed capital.
You need to account for legal and accounting costs for advice on each business you are looking to acquire. A lot of deals fall through, so you will lose this money if a deal does not complete.
Acquiring a business is a high risk investment - unless you are heavily experienced, there is a big chance that your deal could go horribly wrong.
Trying to reach a deal with no initial investment is extremely time consuming and has a very high fail rate.
The Due Diligence process could potentially uncover problems in the business post-sale that were not discussed beforehand.
Integrating another business with yours is a very difficult process.
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