buying a Business
Accelerating Growth
Buying a business can be an exciting process. It can help you become an owner, strengthen your market position, or expand your existing portfolio. To successfully buy a business, your acquisition strategy needs to be carefully planned and executed. Our 'buy-side' advisory services can help you buy a business at the right price, with the right terms and with the right funding in place.
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Helping you buy a business
Introduction to OUR 'BUY-SIDE' ADVISORY SERVICES
WHAT IS BUSINESS FINANCING?
Business financing is sought for the specific purpose of funding business activities which can include acquiring another business, management buy-ins (MBIs) or buyouts (MBOs), a key growth project or investing in new talent. Business financing can help you achieve your growth objectives and strengthen your overall competitive advantage. But the process to secure the business funding you need can be time consuming, stressful and costly if you don’t know what you’re doing.
HOW MUCH BUSINESS FUNDING CAN YOU SECURE?
We work with ambitious, high-growing businesses that have funding needs in excess of £2m and regularly approaching £100m. Our clients’ needs will typically be for sophisticated finance products such as cash flow based lending or private equity investments. Our value lies in helping clients access funding that relies on confidence in future trading and cash flows.
See our deals and success stories.
BUSINESS FINANCING – COMMON PITFALLS TO AVOID
We can confidently say that every client we engage is unprepared to take their funding proposal to their business bank or alternative lender. Being unprepared for funder scrutiny can significantly reduce, or entirely remove, your chances of getting the financing your business needs. Remember: first impressions count.
The typical things that can erode funder confidence and jeopardise your chances of securing a business loan include:
- Failure to fully explain your business model;
- Poor articulation of your value proposition and value drivers;
- Inconsistent, incoherent or incomplete financial information;
- Weak financial modelling and incomplete forecasts;
- Presenting a biased view of business performance and risks;
- Funding proposals that exclude critical information that lenders expect to see.
BUSINESS FINANCING – HOW TO DO IT RIGHT
To successfully secure business funding, whether it’s for supporting an acquisition, a management buyout (MBO) or organic growth, you need to achieve four fundamental objectives:
- Create a robust business plan that stands up to funder scrutiny;
- Articulate that plan in a balanced and coherent way that funders can understand;
- Approach the right partners to fund your plan as part of a competitive process;
- Defend value in due diligence and close your transaction professionally.
Funders need to have confidence in you and your business from the beginning to the end of the financing process. In the world of funding first impressions matter and you must never approach the funding market until you are truly ready. We can help you get ‘market-ready’ to deliver funder confidence and secure the funding you need to make your ambitions happen.
BUSINESS FINANCING ADVISORY SERVICES
By using our business funding advisory services, our experts will ensure that your funding proposal stands up to funder scrutiny and gives you the best chance of securing the funding you need. Below are the different types of business financing we can help you secure:
ADVANTAGES AND DISADVANTAGES OF BUYING AN EXISTING BUSINESS
The advantages of buying an established business can be achieving scale more quickly, acquiring a capability that your organisation doesn’t have, or it can simply be a route to business ownership (through an MBI or MBO) which fulfils a personal ambition.
But buying a business requires a large up-front investment, a significant amount of due diligence, and careful management of internal and external stakeholders. Additionally, you must also remember that you’ll be paying forward many years' profits, so you need to ensure the purchase will return this investment - and more.
WHO DO WE WORK WITH?
We work with seasoned entrepreneurs and high quality management teams in UK SMEs and small-cap PLCs that have the ambition to achieve scale by acquiring or merging with other businesses. In merger and acquisition transactions we often act as an outsourced Corporate Development team helping our clients meet their strategic growth goals.
See our deals and success stories.
BUYING A BUSINESS - COMMON PITFALLS TO AVOID
Regardless of route, buying a business is not a trivial endeavour – it’s stressful, time consuming and fraught with risk if approached in the wrong way. A professional and considered approach is critical to ensure you buy the right business at the right price and maintain the value after the deal is done.
Here are some common mistakes that individuals make when trying to buy a business:
- Not taking professional advice;
- Failure to define acquisition criteria that meets strategic goals in advance;
- An overly bullish assessment of targets and defining criteria ‘on the fly’ to justify opportunities;
- Taking an unstructured approach to assessing the market, thus failing to find the most suitable targets;
- Unrealistic valuations resulting in failure to secure targets, or worse still overpaying;
- Inefficient processes resulting in the absorption of significant management time;
- Deficient due diligence resulting the acquisition of unexpected risks;
- Unstructured approach to communications with internal and external stakeholders;
- Lack of post transaction integration plan to best protect acquired value.
AN ORGANISED APPROACH TO BUYING A BUSINESS
To successfully buy a business, your acquisition strategy needs to achieve these key objectives:
- Set out your acquisition criteria, thinking carefully about what best drives your own strategy;
- Take a structured approach to identifying targets that meet those criteria so you can develop a pipeline of potential targets;
- Develop a professional approach strategy to deliver the conversations you need with potential sellers;
- Have a clear view on valuation and ensure you are able to offer and justify market pricing;
- Make sure you have a well-defined process from offer to completion that ensures risks are identified and mitigated;
- Develop a robust post-acquisition integration plan that protects value.
BUY-SIDE ADVISORY SERVICES
Our "buy-side" advisory services help you identify the right business targets to build your portfolio, secure the deal, pay the right price, and manage risks. We can also help you secure business financing if you don't have the funds in place to make the purchase. These are the different ways we can help you to buy a business:
BUSINESS ACQUISITIONS
Our 'buy-side' experts can help you find and acquire the right business to support your strategic growth objectives.
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MANAGEMENT BUY-IN (MBI)
Our 'buy-side' experts offer buy-side advice to help you develop the opportunity to acquire your next business supported by credible funding packages.
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MANAGEMENT BUYOUT (MBO)
Our 'buy-side' experts offer buy-side advice to help you negotiate the purchase and arrange funding to acquire the business that you work in.
Learn more
BUSINESS MERGERS
Our 'buy-side' experts can advise on bringing together businesses with shared goals and ambitions to grow faster together.
Learn moreAdditional benefits of using Shaw & Co
Showing you how
M&A transactions are complex and your acquisition or merger target needs confidence in your ability to close the deal. We use our experience to gain buy-in and confidence of the target organisation.
Independent evaluation
It is often easy to get caught in ‘deal fever’ and proceed when you shouldn't. Our independent point of view helps keep decisions logical rather than emotional. We are there to support you with those difficult decisions.
Added connectivity
Leverage our networks and connectivity to get access to opportunities that might otherwise not be possible. Use our deal credentials to support your approach and open doors.
FAQS
No - We work exclusively with UK-based SMEs and small cap PLCs. However, our clients often have international activities and we regularly transact with overseas buyers and investors or arrange overseas acquisitions on behalf of our UK clients.
We assist in the acquisition of a wide variety and scale of businesses. The strategic importance of a business to a buyer is not always linked to scale.
We act for businesses and individuals who are serious about buying a business and who are prepared to invest in our services to make that happen. We do not accept contingent search, or contingent acquisition mandates.
No, we don’t offer formal due diligence, although we do offer targeted early-stage diligence as part of our gated assessment process. We work with external providers to scope and deliver the due diligence you need to support your acquisition.
For businesses that see M&A as key to their growth we offer an outsourced Corporate Development function. We work alongside your senior executive team to develop and deliver upon your M&A strategy. Our flexible approach delivers a long-term solution without fixed costs.
When supporting mergers and acquisitions (including MBIs and MBOs) our fees are based on time at our prevailing rate cards. We do not work contingently when buying a business.
No, we do not act contingently when buying a business. We believe that continent fee arrangements when supporting the acquisition of a business lead to a conflict of interest between advisor and client.
We have specific sector knowledge derived from many years of collective deal making experience. However, we pride ourselves on the diversity of sectors we work with which challenges us to think creatively. This creative and challenging approach brings huge value to our clients when helping them to build robust business cases.
Certainly not! Our aim is to become part of your extended team keeping you up to date with all developments. All decisions are yours to make. Our aim is to make those decisions easier.
We take all of our clients through a carefully crafted journey. Firstly, to ensure that we are a great match for each other and once engaged, to ensure we deliver exceptional client service that exceeds expectations.
We put you first
HELPFUL RESOURCES
5 things to consider when valuing a business and how to make a winning offer
Expert opinion
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September 2, 2024
