How to plan an acquisitions strategy

One of the biggest benefits to acquiring a new company is that someone else has often done a great deal of the groundwork to get things up and running, leaving you to fine-tune and improve processes and operations to make the business as profitable as possible.

However, before you get your hands on your potential new purchase, you’ll need to do your homework and set in place a solid acquisitions strategy to ensure that the business you’ve got in mind is the ideal fit for your portfolio.

Here are a few areas that you’ll need to explore as part of your acquisitions strategy to gain further insight on whether or not to proceed as planned.

State your purpose

Every good acquisition strategy starts with a purpose. This outlines how you are going to execute the acquisition, details management structure and sets out how you are going to finance your new venture,

This should be summarised in a few paragraphs and be easy to understand by any stakeholders or potential investors you are hoping to attract.

Background and objectives

Next, your strategy should give a little background on your current business and what objectives you seek to serve by acquiring the new company.

It’s a good idea to also include some information on the company that you are hoping to purchase as this will give anyone who reads your plan a better idea of the synergy between your current companies and the potential new addition.

Technical issues

Acquiring a new company isn’t always plain sailing, so you’ll need to delve deeper into any technical issues that you could be present.

When you start to take a closer look, you might find that problems such as the merging of employee workgroups or departments, digital work systems and databases that don’t communicate with each other and different working processes might need to be reassessed so that your new company gels with your current methods and technology.

Business management issues

Before you forge ahead with your acquisitions, you’ll need someone with the skills and experience to highlight any contractual issues that might be standing in your way. This will include items such as trade-off and risk, costs, budgeting and funding plus transitional planning once the legal element of the acquisition has been finalised.

Once all of these areas have been considered and any areas that require further investigation delved into, not only will you have the basis for a strong acquisition strategy plan, but you’ll also have the insights you require to make an informed decision on whether or not your plans to purchase the company in mind are actually worth pursuing.

Do you have an acquisitions plan in place? What are your must have elements?

Written by
Scott Dylan
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Scott Dylan

Scott Dylan

I’m Scott Dylan, Inc & Co Co-Founder. I oversee the company's strategic direction and work to acquire and invest in distressed and viable companies, helping businesses improve their business processes and setting strategic directions.


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