Buying a Business Case Study
| Age: | 35 | | When: | 2008 | | Total spent: | Confidential | | CV: | Currently sales manager of Smiths Brothers (Quinton) Ltd, manufacturer and supplier of wooden packaging plywood cases, boxes and crates, which bought the business | | Key advice: | It’s very important to have the finance in place and do a lot of market research before committing, so you know what you’re buying. |
BusinessesForSale.com: Why did your company acquire this business? Severine Obertelli: Because it fit in well with what we were doing and it was a good platform. We started a new division specialising in natural building and decorating materials. We found this business and incorporated it within this division. We wanted to integrate some of its products and knowledge, and they had a good website. BFS: How did you raise the finance? SO: We had the finance to pay. BFS: Were there many twists and turns in negotiations? SO: A little bit, but not much. There wasn’t much negotiation. BFS: Nothing untoward in the due diligence process then... SO: No. We had a very good relationship with the seller. It’s been quite straightforward doing the contract because we had the cash and he was keen to sell. Somebody wanted to buy and someone wanted to sell – and that was it. BFS: Wow, selling a business doesn’t usually run so smoothly...
SO: I suppose so. We were fairly lucky. BFS: What was the extent of your role in the sale? SO: I’ve been dealing with it from start to the end. I’ve been responsible for it. BFS: Learnt anything from the experience? SO: I’ve never bought a business before so it’s something different. As I said, we didn’t have any particularly bad experiences, it was always quite straightforward. As a platform the business has been very useful. BFS: So how is the new business unit going? SO: Very well. We’ve integrated it with the rest of the business. It has been very well integrated with the division which was already selling similar materials. It has also improved our search engine optimisation. So if you asked whether I would do it again I would say yes, definitely. BFS: Has the new business helped or hindered you in terms of coping with the downturn? OS: Well, I think it’s very important to diversify in a recession. If all your income comes from one revenue stream then you’re more likely to be affected. The way our business has been set up with different divisions, although we’re not a very big company, we are active in different sectors, which helps. BFS: And you have a bigger web presence now – helpful, as the web represents a growing portion of a shrinking economy...
SO: Absolutely, that’s very important. We’ve got three websites now. BFS: What’s the business’s plan for the future? SO: Try to strengthen even more in the sector we work in and increase our presence. We sell directly to the public as well as major companies, so our customer range is quite varied. We just want to continue building on what we’ve built up over the past few years. The company has been around since 1927, so we’re always trying to improve and adapt to the times. BFS: So the company has survived the Great Depression and a few other recessions... SO: Oh yes, it was born around then and we’re still here. Hopefully we’ll still be here in a few more years! BFS: Any advice to buyers? SO: It’s very important to have the finance in place and do a lot of market research before committing, so you know what you’re buying. When we bought the business I had done a lot of market research. | 
