Can Anyone Buy a Company?
In principle, yes – but with important limitations. The acquisition of a company is theoretically open to everyone, but in practice, there are numerous hurdles and requirements that must be met. These range from financial resources to professional qualifications and personal characteristics. While some obstacles can be overcome, others represent genuine exclusion criteria.
Legal Requirements for Buying a Business
From a purely legal standpoint, any legally competent adult can purchase a business. There are no specific laws that generally prohibit or restrict the acquisition of a business. However, industry-specific requirements must be observed:
Licensed Businesses and Admission Requirements
In certain industries, conducting business activities is contingent upon specific qualifications or permits. This is particularly regulated in the craft trades. The Crafts Code distinguishes between:
- Licensed crafts requiring a master craftsman certificate
- Crafts and craft-like trades exempt from licensing
While you can formally acquire a business without the necessary professional qualifications, you are generally not permitted to operate it independently. Possible solutions include:
- Hiring a professionally qualified operations manager
- Obtaining special exemptions under certain conditions
- Acquiring the necessary qualifications prior to takeover
Similar regulations apply to many other sectors such as gastronomy, care services, financial services, or pharmacies. These often require special licenses, concessions, or professional certifications.
Financial Barriers to Buying a Business
Financing is the biggest challenge for most buyers. Sufficient equity capital is usually essential, with banks typically expecting an equity share of 20-30% of the purchase price.
Can You Buy a Business Without Equity Capital?
The question of business succession without equity capital is frequently asked. In fact, there are ways to buy a business with almost no equity capital, but these are demanding and require special circumstances:
- Seller financing, where the seller defers part of the purchase price
- Earn-out arrangements, where portions of the purchase price are paid later based on performance
- Combining various funding programs such as KfW business loans
- Involving co-investors or silent partners
Financing with low equity is possible but significantly more challenging, requiring a particularly convincing business plan and excellent personal qualifications.
Personal Requirements for Successful Business Buyers
Beyond formal and financial requirements, personal qualifications play a crucial role. Every prospective buyer should honestly ask themselves: Do I have what it takes to buy a business?.
Entrepreneurial Competence and Experience
An ideal business buyer should possess:
- Industry knowledge and market experience
- Basic commercial skills
- Leadership experience
- Business management understanding
Lacking these qualifications is not an absolute exclusion criterion but does present additional challenges. Career changers without professional experience can be successful if they bring other strengths and are willing to compensate for missing know-how through further training or by involving specialists.
Personality Traits of Successful Entrepreneurs
Successful entrepreneurs exhibit certain personality traits, including:
- Decisiveness and assertiveness
- Resilience and stress tolerance
- Willingness to take risks combined with responsible behavior
- Communication and negotiation skills
- Problem-solving ability and adaptability
These traits are not innate and can be developed to some extent. However, an honest self-assessment is important to determine whether entrepreneurial independence is truly the right path.
Alternatives to Full Business Acquisition
If the prerequisites for a full business purchase are not met, various alternatives exist:
Gradual Acquisition and Partial Ownership
A gradual takeover allows acquiring only parts of a business initially and assuming responsibility step by step. This reduces the initial capital requirement and gives the buyer time to grow into the entrepreneurial role.
Management Buy-In with Partners
In a Management Buy-In (MBI), an external manager takes over a business together with financial partners. The checklist for Management Buy-In outlines the key steps of this process. The advantage: financial burden is shared among several parties, and different competencies complement each other.
Search Funds as an Innovative Acquisition Model
Search funds represent an innovative model for business acquisition. Here, an entrepreneurial "searcher" raises capital from investors to specifically look for a suitable business, acquire it, and manage it long-term as CEO. The funding structure enables individuals without substantial equity to become entrepreneurs.
The Path to a Successful Business Acquisition
Despite all challenges, buying a business is a realistic and attractive path to self-employment for many. The following steps can help shape a successful acquisition process:
1. Self-Assessment and Preparation
Before targeting specific businesses, you should:
- Analyze your personal and professional strengths and weaknesses
- Realistically assess your financial capabilities
- Clearly define your goals and expectations
- Identify and close knowledge and skill gaps
2. Secure Professional Support
Buying a business is a complex process that requires expert guidance. M&A advisors can provide valuable strategic support during the acquisition. Although the costs of M&A advisors may initially seem high, this investment is usually worthwhile to avoid costly mistakes.
3. Systematic Search and Selection
Various channels are available to find suitable acquisition candidates:
- Business exchanges and specialized platforms
- Industry networks and associations
- Direct approach to potential sellers
- Tax advisors and auditors who often act as intermediaries
A systematic approach based on a business acquisition checklist is crucial.
4. Thorough Review and Due Diligence
After identifying a potential target, a comprehensive examination of all relevant aspects follows within the scope of due diligence. This includes:
- Financial due diligence to assess financial status
- Legal due diligence for legal matters
- Commercial due diligence to evaluate the market environment
- Tax due diligence for tax risks
Due diligence costs should be viewed as a necessary investment in your own security.
5. Negotiation and Closing
Effective negotiation strategies for buyers help secure a fair price and reasonable terms. Managing differing price expectations requires tact and negotiation skills.
6. Integration and Takeover Management
After the purchase, the critical phase of integration and leadership transition begins. The first 100 days are decisive for long-term success. Especially employee management post-acquisition and cultural integration demand sensitivity and strategic action.
Conclusion: With Proper Preparation, Little Stands in the Way of Business Acquisition
The question "Can anyone buy a business?" can be summarized as follows: Legally, business acquisition is open to almost everyone; practically, however, there are hurdles that must be overcome. With proper preparation, professional support, and a realistic assessment of one’s own capabilities, even individuals without extensive entrepreneurial experience and with limited capital can successfully embark on self-employment through business acquisition.
The key is not to be deterred by perceived obstacles but to find creative solutions and optimally utilize available support options—from funding programs to advisors. The large number of businesses seeking successors in the German Mittelstand offers attractive opportunities for motivated buyers, even if classic prerequisites are not fully met.
Ultimately, the key to successful business acquisition lies in careful preparation, honest self-assessment, and a willingness to continuously learn and develop. With this mindset, little stands in the way of a successful path to entrepreneurial independence through business acquisition.