There are good and not so positive issues in every deal structure. If you dream of buying the company you currently work for, take a look at some headline positives and negatives. Equally if you are the vendor these points are also worth considering.
This may be a great opportunity for you to become an owner of the business, potentially as a result of the existing owners wanting to exit.
You may believe that substantial personal investment is required, but the majority of MBOs are funded by third parties. An MBO is usually attractive to all involved as it gives the business the continuity and stability required and therefore, third parties are more likely to invest in a transaction of this nature.
Critical questions which need addressing straight away:
- How much is the business going to cost to buy?
- How on earth am I going to finance it?
- What will funders want before they meet me?
- Who else will I need to help make this all work and how will I pay them?
- How am I going to do this transaction and still maintain my day to day job?
We have all the answers:
- We have done a number of MBOs
- It’s a challenge, but one that if managed properly is more than doable
- Particularly to the big question of why am I paying for a business I helped to build! - Don’t worry, we will do all the worrying for you and get you to the finish line with all parties feeling they have a fair deal.