When should I buy another business?
The statistics are frightening, over 80% of Acquisitions and Mergers fail!
Yes over 80%, and principally because they were not well planned, nor executed and integrated and seemed a good idea at the time.
You should buy another business when it makes strategic sense to do so. That means you should have a strategic business plan that has identified the need to grow your business through acquisition or merger so as to acquire something you cannot build organically in your required timeframe. It may be a product/service line that is complementary to what you already do, it may be to gain access to a geographical region or market segment in which you do not have a presence, it may be to remove a competitor and combine two great brands. Whatever the reason, it should be an irresistible and convincing one!
Many acquisitions and mergers fail as the implementation plan to blend the businesses is not well thought out or executed. If you decide to proceed then clearly state what you expect to achieve, how it will be delivered and develop and monitor the plan to ensure you achieve what you paid for.