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To Buy or Not to Buy: That is the Question

Considering making an acquisition or selling a business? Read this blog post before finalizing your decision!

There are many steps to take as you consider making an acquisition or selling your business, but here are two you may not be considering:

  1. Using an outside party to conduct market research on customers' relationships with the entity in question
  2. Hiring an outside party to forecast the business’ sales three years out, using Business Cycle Theory and Leading Indicator evidence

How could these provide additional value to your decision-making process? Let’s start with number one.

Conduct Market Research on the Relationship

Knowing customer satisfaction will help you determine whether the business is healthy. If the majority of customers inform market researchers that they are disgruntled about pricing, customer experience, or the product itself, you may have other steps to take before finalizing your decision to buy or sell this business. If you are on the buying side, perhaps you could use this negative feedback to negotiate a better purchase price!

A business partner of ours, Strategex, provides exactly this type of service; they call it “Voice of the Customer” research. They are experts in this field and have helped businesses save and/or make millions. I highly recommend you check them out!

As for using an outside entity to forecast sales, well, yes, that’s where we come in.

Sales Forecasting – A "Must" for Executing Your Decision at the Right Time

We all know that sales forecasting is necessary for properly running a business, but it’s also a great tool for knowing when to buy or sell a business. 

ITR Economics' sales forecasting uses Business Cycle Theory. This is important because it means that we will not give you a linear projection. You will clearly see when the business is expected to reach its next cyclical peak (best time to sell) and its next cyclical low (best time to buy), as well as the amplitudes telling you the rate of growth or decline to expect. All of this will help you determine how much the business is worth, giving you another data point as you put together your plan to either purchase or sell a company.