forward1
join:2006-10-19
Sterling, VA
| Re: Buying competitor's company Some of the others have already said it in one form or implied it but here it is again:
When you buy his company, you get his problems, obligations and commitments, decision baggage and unhappy customers. Make sure you can handle all of those. Whoever buys him up will have the same issues so it doesn't matter if they are bigger because they will have to put in that much work and money and so on.
His main assets (if you want to call them that) are his customers and tower locations since it sounds like you don't like his equipment. Ask yourself when you think he will fail and how many of his customers you can get as he spirals down should you choose not to him out. That might be a good way of growing under YOUR controlled pace. Your current customers that were converts from his service is your best source of info.
If you do say that you can handle his issues, problems etc, ask to see his cash flow statement and other numbers before you even agree to a price. After all, if he has lousy numbers you'd better offer a lower price and vice versa. Ask to see his contracts with his clients and the tower locations because you need to know how long they are for and how much and what your rights are.
Sketch out a business plan (for after purchase) for the next 6 to 12 months after acquisition and project expenses for your equipment replacement, additional BW costs, retraining etc. Then look at those projections and see if you can handle them based on the revenue etc. |
