TitleCard Capital discusses business buy outs

TitleCard Capital is a firm that specialises in business buy outs. If a company that you have always been inspired by, or thought of a direction that you could take it in, hits trouble and the owners are unable to find a way out; then it is possible for another company, individual or set of individuals to do a buyout of that company. This can be your path to wealth and success. The purchase is extra profitable when interest rates are low.

Companies will consider buy outs of other businesses when it seems as if this is the only way that they can grow. They may even want to buy out their competitor to increase their share of the market and perhaps become the only big player in their chosen field. It isn’t all cheery though as buy outs themselves can be very complex processes.

Here are the steps for completing a successful buy out.

Work out who you want to buy out ensuring that it is a business you understand. Remember you will need the capital to pay off the companies’ debts which you will fully need to have quantified. You will have to pay other buy out costs so you need to ensure that this will still remain a viable option. Ideally viewing reports and accounts should show lots of positive business and money making, but a few hurdles that have just been too hard for the current management to overcome. You and your team can therefore look to returning to the halcyon days after overcoming these issues.

This leads onto the next step which is making sure you have the right team together ready to work in making this business the success that it once was. Ensure you have a fully committed team who you trust, who you know can work together and who can deliver.

This of course should be all set out in the third step of the process, the business plan. Ideally you should have this created before you buy out the company. This proves that you know the business and how to make it a success. It shows that you have considered the intricate details and have a plan that shows profitability. They should detail your operations, e.g. how you are going to make this business a future success.

This will fall hand in hand with step four which is ensuring that you have the finances to pay off all debts and the buyout costs. Your plan should show profitability within a five to seven-year frame. You may have to get bank loans which all need approval before the acquisition and you should be all set to go.

Then it is just the question of the formalities and sealing the deal. You need a formal letter of intent drawn up to present to the current business owners. A firm of accountants will be needed to research any pitfalls and confirm final debt values. This is called due diligence and it is a legal part of the buyout process. Attorneys will also need to be on board for the legal documents and contracts. From start to finish it will only take six months which isn’t a long time in the great scheme of things.