Research is essential to the success of any business plan, including acquisition. The demand-driven, “markets first” acquisition process that I advocate requires thorough research. Only thorough research uncovers the most appropriate markets, helps you identify the best prospects, and sets you apart from other potential buyers.
There are two levels of research to consider: primary and secondary research.
Secondary research is the easier kind of research, drawing from public sources such as the Internet. Secondary research enables you to explore market size, growth rates, supply chains and other market dynamics. This is an essential requisite that prepares you for conducting the more difficult but more rewarding primary research.
With primary research, you get on the phone and talk to a variety of industry players and observers about the market, industry trends, and where possible, your acquisition prospects.
Both primary and secondary research are key to your acquisition process. At the planning stage, understand the importance of research ensures that you and your team are committed throughout the rest of the process.
*This post was adapted from David Braun’s Successful Acquisitions, available at Amazon.com