BLJ Benlevi Lennon Junzi
BUY A BUSINESS
BUY A BUSINESS
Should You Buy or Start-up New?
Generally BLJ recommend buying companies instead of startup for the following reasons:
- 1). Cost Saving Synergies: a company that horizontally acquires competitors or similar business can often realize immediate cost savings of 2-3% of revenues.
- 2). Horizontal acquisitions gives your pricing power
- 3). Most startups fails, so by acquiring existing business you avoid business development risks;
- 4). Arbitrage opportunities from buying companies with P/E multiples lower than your own;
- 5). Acquire low risk companies to increase your own P/E multiple
- 6). Acquire high growth companies to increase your own P/E multiple
- 7). Increased borrowing capacity by having two income streams for lenders (like getting married and having two incomes instead of one)
- 8). Unlike startups, existing profitable business provides immediate income stream to help pay for business expenses
This program most times involves no fee to the buyer so long as the on-market business involves a listing broker who is willing to co-operate and pay BLJ'S service fees. Under the On-the-Market Program, a BLJ business intermediary will meet with you to determine and understand your acquisition criteria, however your ability to find a business matching your criteria will be limited to the business listed in the on-market inventory. This program is designed for those who are typically looking for a “Main Street” business where the buyer is non-strategic, non-synergistic, non-industry, or non-financial in scope. You will also be notified of new Main Street listing opportunities that are added to the inventory. though the BLJ Intermediary is working with you to match inventory opportunities that meet your general criteria.
This is in variably a buyer-pay fee-based program that is not limited to On-the-market co-brokered business transactions. Under the Off-the-Market program, your BLJ Business Intermediary takes the time to determine, in great detail, the specifics of your desired criteria, succinctly articulates it in a custom marketing tools to confidentially expose the specifics of your criteria to investors and other intermediaries. In addition, BLJ will conduct targeted searches within specific geographic, financial, industry, and other such criteria, and explicitly solicit specific targeted potential business opportunities.