Thinking of Buying a Business?

 

Acquiring a business can be a powerful route to growth, whether you're looking to expand into new markets, strengthen your customer base, or secure new capabilities. But it’s not without risk. From hidden liabilities to working capital demands, what might look like a great deal on the surface can quickly unravel without the right approach.

Start with the right mindset

Before diving into numbers or negotiations, it’s important to get clear on your objectives and goals for doing it.

• Why are you considering buying a business?
• Are you after new customers or access to a specific market?
• Is it about acquiring talent, IP, or infrastructure?
• Are you trying to remove a competitor or create operational efficiencies?

Understanding your why will shape your strategy and stop you from getting distracted by the wrong opportunities.

Build a business case that holds up

Once you’ve got a clear strategic rationale, the next step is to create a business case. This should show how the acquisition will add value over time, and what assumptions you're basing that on.

Ask yourself:

• What synergies or efficiencies can be unlocked?
• What will success look like after 12–24 months?
• Who in your business will be responsible for making the acquisition work?

The more realistic and grounded your case, the easier it will be to make sound decisions throughout the process.

Get the financial modelling right

Many deals come unstuck because the financials weren’t properly stress-tested. It’s essential to look beyond the headline price and understand the full impact on your business.

Here’s what to factor in:

• Customer retention – Will all contracts transfer? What drop-off rate should you model?
• Staffing – Will you inherit a team? Will you need to scale up your own resources?
• Working capital – What will you need to keep things running day to day?
• Payout terms – Is it a lump sum or staged payments? Are there performance-based earn-outs?
• Stock – Will you be taking on inventory? If so, what is it worth, and will you need to replace it?
• Capital investment – Are there systems, vehicles, or infrastructure you’ll need to upgrade or integrate?

Working closely with your advisors through each stage helps you stay on track and avoid missed details. At Oldfield we have helped our clients through this many times therefore we are experts in the field, if you need assistance or a second opinion please reach out to us and we will be more than happy to assist.

Are you aware of the common pitfalls?

Some of the biggest issues we see in acquisitions relate to what’s not in the sales brochure.

Here are some key areas to check:

• TUPE & employee rights – Are there staff transferring over? If so, what are their terms and protections?
• Stock – Is it usable? Does it match the value in the accounts?
• Contracts – Can customer and supplier contracts be transferred or reassigned?
• Undisclosed liabilities – Things like pending disputes, tax issues, or lease obligations.
• Cultural fit – Will their ways of working mesh with yours?

Getting a full due diligence process in place (not just financial, but legal and operational too) is vital to protect your business.

Final thoughts

Acquisitions can deliver transformational growth, but only if approached in the correct way, and with the right professional support. By investing time up front in building a solid business case, modelling the financials, and understanding the full acquisition process, you significantly increase the likelihood of making a successful acquisition.

Are you thinking about a business acquisition in 2025? We help SMEs navigate every stage of the acquisition journey, from initial strategy and modelling through to due diligence, negotiation, and completion. Whether you’re evaluating your first opportunity or looking to scale through acquisition, we can support you with insight, structure, and clarity.

For more information on how we can help you and your business, please contact us via info@oldfieldadvisory.com or call 02476673160 for support and advice. Let’s work together to grow and strengthen your business.

Please note: This article is provided for information only and was correct as at the time of writing (10/07/25). Any lists and details provided above are not exhaustive and are not intended to be full and complete guidance. No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this article can be accepted.