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Acquiring another company can aid a startup in its growth and expand its market. However, it can also present difficulties. Many pre-Series B businesses do not have the financial resources needed to make an acquisition feasible. Even if they do, integrating new teams, customers and processes is a significant task.

Companies must prepare for a successful purchase by taking a few steps. For example, it’s important to create anticipated future projection tables that will help determine whether an acquisition will be beneficial for the company. These tables allow companies to see the impact of an acquisition on its P&L, and the balance sheet. Also, it’s important to think about the possibility of synergies and scaling economies. If a firm can save money by consolidating its factories, offices or projects, it can utilize the money to invest in other projects.

In addition to determining the project’s costs it is important to establish the valuation of an acquired business. This will allow the company to negotiate with a seller on a price that’s acceptable. To find the most competitive price, a business must research and identify potential targets that meet their requirements. It could be a rival or a company that has core technology, products or an existing customer base that can aid in the growth of the business.

To speed up the process of the process of evaluating and choosing potential targets, businesses should work with business brokers, who can provide insights into different industries and the company’s values. They can also help businesses connect with interested purchasers and vice versa.