Acquisitions can be fun and exciting and a great way to grow your company quickly. One of the first lessons you want to learn though when considering an acquisition is to recognize this important fact – it’s almost impossible to overcome a bad purchase price.
Meaning that paying too much for an acquisition can be deadly.
It’s kind of like buying real estate. You make your money on the buy, not the sell. Buying at the right price makes it possible to sell it later at a price that yields a nice profit.
Here’s the Secret
When evaluating an acquisition opportunity, make sure you have a number of different people (and personality types) assisting you.
Some of the biggest mistakes I have seen entrepreneurs make is they tend to look at the deal only through rose colored glasses. The problem is you don’t get a complete look at the business and the related risks when you look at it through only one lens.
You want to evaluate the deal from every angle. From the upside to the downside. The ins and the outs. The pluses and the minuses.
Trust me; you don’t want to have to try to dig out of a bad purchase price. It will more than ruin your day!
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