Buying a Company: Checklist for a Successful Acquisition

Purchasing an existing company offers many advantages over starting a new business: established customer relationships, proven business processes, and immediate revenues. However, acquiring a company is complex and requires careful preparation. This comprehensive checklist guides you systematically through the entire acquisition process—from the initial idea to successful takeover.

The 8 Crucial Steps in Acquiring a Company

An acquisition can be divided into eight essential phases. Each phase involves critical decisions that you must make before moving on to the next step.

• 1. Clarify personal motivation and competencies
• 2. Build network and resources
• 3. Find suitable companies
• 4. Screen potential acquisition candidates
• 5. Conduct thorough due diligence on top candidates
• 6. Develop acquisition plan and financing
• 7. Negotiate and draft contracts
• 8. Complete formalities and take over the business

1. Clarify Personal Motivation and Competencies

Before you begin searching for a suitable company, you should first analyze your own starting position:

• Create a personal profile: What qualifications and skills do you bring? Do you have necessary licenses (e.g., master craftsman certification)?
• Question your motivation: Why do you want to take over a company instead of founding a new one? Do you enjoy leading and organizing?
• Develop a future vision: How do you envision your professional and private life after the acquisition?

Practical tip: Make a list of your strengths and weaknesses. Consider how these align with the requirements of an entrepreneur in your target industry.

2. Build Network and Resources

Acquiring a company is not a solo endeavor. Build a supportive network early on:

• Identify experts: Look for specialized lawyers, tax advisors, and business consultants experienced in company acquisitions
• Find financing partners: Establish contacts with banks and gather information about funding programs
• Involve your personal environment: Discuss your plans with family and friends

Practical tip: Attend networking events in your target industry and reach out to chambers of commerce or trade associations, which often offer specialized advisory services for business succession.

3. Find Suitable Companies

After preparation, the active search for suitable acquisition candidates begins:

• Conduct industry analysis: Examine various sectors regarding future viability, market potential, and personal fit
• Develop a search profile: Define clear criteria for your search, including deal-breakers
• Use search channels: Research through:
  • Succession platforms such as nexxt-change
  • Specialized M&A consultancies
  • Your professional environment (current employer?)
  • Industry associations and chambers

Practical tip: Don’t forget to consider less obvious options—companies are often discreetly offered for sale before being publicly listed.

4. Screen Potential Acquisition Candidates

Once you have a shortlist, it’s time to examine these more closely:

• Analyze the business model: Use structured methods like the Business Model Canvas to understand the core business
• Assess transformation needs: How many changes are necessary to make the company future-proof?
• Test personal chemistry: Conduct initial talks with sellers—the interpersonal fit is crucial
• Check price expectations: Evaluate whether the asking prices seem realistic (e.g., using the multiplier method)

Practical tip: Create a comparison table with criteria such as chemistry, transformation needs, and price to identify your top candidates.

5. Conduct Thorough Due Diligence on Top Candidates

For your preferred one or two companies, the intensive examination process begins:

• Perform due diligence: With professional support, investigate all aspects of the company:
  • Financial situation (balance sheets, profit and loss statements, liquidity)
  • Legal matters (contracts, liabilities, litigation)
  • Market position and competitive environment
  • Personnel (key employees, employment contracts)
  • Customer and supplier structure
• Identify legacy issues: Look for hidden risks (tax back payments, environmental liabilities, etc.)
• Obtain valuation reports: Have experts determine the appropriate purchase price
• Involve key personnel: Talk to important employees about their future plans

Practical tip: Arrange a non-disclosure agreement (NDA) before receiving detailed access to sensitive company data.

6. Develop Acquisition Plan and Financing

After thorough due diligence, concrete planning of the acquisition follows:

• Determine acquisition form: Decide between purchase, lease, gradual takeover, or other models
• Create an acquisition plan: Develop a detailed business plan specifically tailored to the takeover situation
• Secure financing: Clarify how the purchase price will be financed:
  • Equity contribution
  • Bank loans
  • Grants and subsidized loans
  • Seller financing
• Plan tax optimization: Consider tax aspects when structuring the deal

Practical tip: Use the funding program finder on the Gründerplattform to identify suitable funding options for your acquisition.

7. Negotiate and Draft Contracts

Legal protection of the acquisition is achieved through carefully drafted contracts:

• Develop the purchase agreement: Work with specialized lawyers to create a tailored contract
• Regulate essential components:
  • Precise description of the purchase object
  • Purchase price and payment terms
  • Warranties and guarantees
  • Transfer date
  • Liability provisions
  • Non-compete clause for the seller
• Align wills and agreements: Check consistency with company bylaws and wills
• Sign contracts: Formally close the deal, often notarized

Practical tip: Check whether chambers of commerce or trade associations offer sample contracts that can serve as a basis.

8. Complete Formalities and Take Over the Business

After signing the contracts, practical implementation of the takeover begins:

• Official registrations: Update entries with:
  • Trade office and tax authorities
  • Commercial register or trade roll
  • Professional associations
  • Employment agency
• Transfer contracts: Assign ongoing contracts (rent, insurance, licenses, etc.)
• Plan communication: Inform employees, customers, and suppliers in a structured manner about the ownership change
• Organize onboarding: Plan handover by the predecessor and your own integration phase

Practical tip: Create a detailed schedule for all formalities and assign clear responsibilities.

Common Challenges in Company Acquisitions

Pricing and Valuation

Determining an appropriate valuation is one of the biggest challenges. Sellers often want to factor in the emotional value of their life’s work, while buyers seek an economically justifiable investment.

Solution: Combine various valuation methods (asset value, earnings value, multiplier method) and involve independent appraisers.

Closing Financing Gaps

Financing the purchase price poses difficulties for many buyers, especially if personal funds are limited.

Solution: Explore creative financing models such as:

• Earn-out models (performance-based purchase price payments)
• Installment purchase agreements
• Seller financing
• Mezzanine financing
• Equity participation

Managing the Transition Process

Knowledge transfer from seller to buyer is critical for acquisition success.

Solution: Agree on a structured handover phase with clear milestones and document key processes. Involve the seller as a consultant.

The Right Timeline for Your Company Acquisition

A successful acquisition takes time. Here is a realistic timeline:

Phase	Time Required	Notes
Preparation (Steps 1-2)	2-3 months	Don’t underestimate groundwork
Search and pre-selection (3-4)	3-6 months	Depends on market availability
Due diligence (Step 5)	2-3 months	Conduct thorough due diligence
Planning and contracts (6-7)	2-3 months	Careful legal protection
Takeover (Step 8)	1-2 months	Ensure smooth transition
Total Duration	10-17 months	Plan buffer time!

Practical tip: Expect at least one year for the entire process—impatience is a poor advisor for such an important decision.

Conclusion: Company Acquisition as an Opportunity

Purchasing an existing company offers an attractive path to entrepreneurship. With careful preparation and a structured approach, this process can be successfully managed. The current "succession wave" in the German Mittelstand—with over half a million upcoming transfers in the next years—also opens up diverse opportunities for potential buyers.

Use this checklist as a guide for your own acquisition and seek expert support early on. A well-thought-out acquisition can be the foundation of your entrepreneurial success.