There are several steps business owners should take before and during the acquisition of another company for expansion purposes.

After establishing their operations and turning a profit, many businesses in Massachusetts decide to expand their operations and in turn, increase their revenue by acquiring another company. Business owners can be successful as they embark on this process as long as they follow several guidelines for acquiring and merging another business with their own.

Thoroughly review financial documents and projections

Before researching other businesses, entrepreneurs should review the financial status of their operations and determine how much they are willing to spend not only to purchase the business, but to manage it moving forward. Taking this step can help business owners figure out which types of businesses or which relative brands are the best option for their projected budget.

Develop a workable plan

Acquiring another business is a large investment of both capital and personal time. Before moving forward with an acquisition, entrepreneurs should ask themselves the following questions:

• What is the purpose of the acquisition?
• How will the acquisition be financed?
• What are the, if any, cost savings and added efficiencies that will result from the transaction?
• What process will be used for targeting potential companies to purchase?

The answers to these questions should be compiled into an acquisition guide that acts as a point of reference throughout the duration of the process.

Pick the right business

An acquisition for expansion purposes can only be successful if the right business is purchased. Entrepreneurs should carefully research potential acquirements by looking into their existing licenses and permits, zoning requirements and any environmental concerns. The value of the business, including its current capitalized earning approach, tangible assets, cash flow method, and excess earning method should also be understood.

Assemble a team

Business owners should develop a working team from their current company made up of representatives from sales and marketing, operations and finance to manage the transition of acquiring another company. In addition to these internal representatives, entrepreneurs may want to consider seeking outside help from valuation professionals, accountants, investment bankers and insurance specialists.

The role of an attorney

An attorney can also be a valuable resource to turn to for business owners in Massachusetts in the process of acquiring another company. An attorney can help business owners break into a current market, figure out which companies can be acquired and navigate the legal process of the acquisition itself. This may involve dealing with non-compete agreements, rebranding if necessary and keeping valuable employees during the transition.

Additionally, an attorney can adjust the business’ estate plan to account for the newly-acquired company. Those interested in moving the acquisition process forward should contact an attorney in their area for legal assistance as soon as possible.