Finding a list of companies to acquire is exciting! You start thinking about all the possibilities and how the deal will grow your business exponentially. But before you move forward with any of these candidates, take a step back and make sure you are looking at companies in the right markets.
What are the “right markets?” Markets that have a healthy, stable demand and are growing. After all the primary driver for acquisitions is to help your company grow. Without researching markets first, you risk acquiring a company in a stagnant or declining market. Although the company may have strong financials today, if there’s no demand in the marketplace, your acquisition won’t deliver the expected returns on growth in the future. Without first selecting a market, you have reason to beware of even the most tempting buying opportunities.
Finding the right market begins by defining the market using geography, verticals or another relevant factor, and by developing market criteria to aid in your decision-making. Your research will begin with a broad sweep and become progressively narrower as you learn more about the market. Your market criteria will help you objectively evaluate and compare the markets against your strategic rationale for acquisition.
Researching markets first not only helps you avoid acquiring a bad company, it helps you identify the best companies to buy. By conducting market research, you will gain a better understanding of the market, which will help you evaluate acquisition prospects and negotiate with owners as you proceed with the acquisition process.
Learn more about the “markets first” approach in our upcoming webinar How to Pick Top-Notch Markets.
After this webinar you will be able to:
- Understand the market-driven process
- Explain market criteria (market growth and size, competitive dynamics, barriers to entry) and how to use them to evaluate a market or segment
- Describe effective secondary & primary market research techniques
- Explain the triangulation technique to obtain the most relevant information for accurate decision-making
- Develop tools to objectively compare and contrast markets
Date: Thursday, February 23, 2017
Time: 1:00 PM – 2:00 PM EST
CPE credit is available,