Ready, Aim, Fire. Plan, Search, Acquire.
In many ways, it’s harder to buy a company than it is to sell. Owners of companies can take time to plan their exit and get ready to sell. They’ve owned the company for years, sometimes decades, and they know where the skeletons are buried. Buyers have to find them.
Buyers are often presented with an opportunity and have to act quickly, or, at least, they think they’ve got to act quickly. This means many times that screening the company is rushed, negotiations are rushed, and due diligence is rushed. The hallmark of these dangerous conditions is generally described by companies’ saying, “We’re opportunistic.” Or, said another way, “We don’t have a plan.”
They don’t proactively develop a plan, and then go out and look for acquisitions. The results frequently reflect the lack of planning. It happens all too often.
Developing a methodical, well thought out, comprehensive acquisition plan is critical for increasing your odds of not missing a good opportunity, or, worse, acquiring a bad opportunity. Everyone has heard “Ready, Aim, Fire.” That’s good advice. In acquisitions, it translates to “Plan, Search, Acquire.”
There’s no substitute for a good plan. Dwight Eisenhower said, “In preparing for battle, I have always found that plans are useless, but planning is indispensable.” He didn’t mean that there’s no use to plan. Just the opposite. What he meant was, when the battle starts, the well laid out plans you made are not going to go exactly as you thought they would when you laid them out. But the more prepared you and your people are, the better able you are to react to, and successfully handle, both expected and unexpected events.
Executing an acquisition plan, including unexpected situations, is difficult to handle. But the better and more thorough your plan is, the more likely you are to be successful.