Acquiring a company is just like playing golf. Anyone can get a membership, but not necessarily be a pro on the first try. The same goes for the acquisition of a business. You’ll need to incorporate some basic principles into your game to reduce the number of foul shots you make; the rest is just practice.
Book your golf tee!
It would make no sense to get on the golf course and demand to play on the spot without reservation. So why would you inform your banker at the last minute and press him to disburse the funds required for your transaction? Like any other golf club, there are rules to follow and a schedule to respect. You’ll realize how welcoming the people at your bank, or your golf club become when you do so. Prepare your request for transaction funds 3 to 6 months in advance and your reservation for golf tees 3 to 6 days prior.
Respect the Pro Tips!
You can avoid the pro-tips, therefore, not having to pay the price that comes to get them. You can also avoid paying professionals to help you through the due diligence process or your pre-game, but at what cost? The price tags on the mistakes occurring due to the lack of advised opinions to help you with the style of player or businessman are generally very high.
The due diligence process is the best way to determine the type of companies you should buy. Like golf, this is the best time to analyze your every move, knowing which ones you should keep and which you should look out for. Professionals will be beneficial throughout that part.
An excellent professional will save you money and much time. Everyone knows that time is money!
Playing for the wrong reasons!
You’ve probably already played golf with someone who wasn’t there for the fun of playing the sport but for other unrelated matters. It could have been that they were obligated to participate in corporate activity. That person should have done something else with their time. Life is too short.
You’d be surprised by the sheer number of entrepreneurs that make acquisitions for the wrong reasons. The most common mistake is to acquire a company to address management weaknesses. The acquisition will only exacerbate poor management practices and the resulting financial risks.
When doing a merger, 2+2 should equal 5 instead of 3. Like golf, we most likely get a terrible score when we play for the wrong reasons. More than three thirds of transactions don’t turn out as everyone expected and doing them for the wrong reasons explains this phenomenon.
18 holes are long!
I don’t know if you’ve ever experienced it but playing golf for hours with someone who disregards your pace and the rule your foursome wants to follow is a pain. In business, we should always know if the company we’re trying to buy has a similar business culture.
Integrating cultures is a pro sport. Choose the right business with the right culture to help you succeed faster.
You are at the first tee!
First tee: The journey begins! Just like golf, it’s hard to predict how the game will end. You’ve done everything a good golfer or entrepreneur should do, but you’re exploring a new golf course and barely know your fellow players. This is the most challenging stage, and there is no doubt that you will feel insecure. Serial buyers or professionals will tell you that this is their favourite stage.
This step is the most important, and your talent will be called upon. You will have to avoid many challenges and pitfalls. If you have played well, then your results will motivate you and make you want to do it again. Like in golf, beating your handicap is a matter of luck and, above all, attitude.
I wish you the best of luck. Attitude is an ingredient that must be cultivated.