What is your growth strategy for 2018? Some companies target new markets. Others launch new products. And some companies acquire or merge with other companies to expand their reach, capital and resources.

When acquiring another company, there are key steps to ensure you reduce risk and meet your goals. In this issue, Promotional Consultant Today shares these personal tips from entrepreneur John Rampton, who founded the online payment company Due.

1. Do Your Research And Due Diligence. Rampton says to invest time on research prior to making an offer on another company, including reviewing these documents:

Letter of intent. This includes purposed price, the terms of the purchase and the conditions for the sale of the business

Confidentiality agreement. Look for verbiage that states that you will not share the seller’s information.

Contracts and leases. Review to see if the location of the business has a lease.

Financial statements. With a CPA, review the company’s financial statements for the past three to five years.

Tax returns. Review these for the past three to five years.

Other important documents. These include employee contracts, customer lists, sales reports, licenses, leases and permit.

Also, get professional assistance. Ask an attorney to review the legal documents and an accountant to look over the financial records.

2. Assemble A Dream Team. Create an internal team that includes a range of roles from sales, marketing, operations and legal, as well as outside advisors such as accountants and valuation experts to review the opportunity. Each perspective is important to the process.

3. Respect Prior Products, Services And Customers. Learn about and be respectful to prior products, services and customers. This is an important history to help you understand the value of the business.

4. Secure Digital Rights. With so much going on, it’s incredibly easy to overlook locking up the digital rights of a company. This includes passwords, web domains, and social media and email accounts. Also, don’t forget to obtain the email accounts from customers, clients, vendors, etc. so you can inform them of the acquisition.

5. Reduce The Purchase Price. If you’re looking for ways to reduce the price of the business, then you may want to start by looking for indicators of a distressed sale, including:

  • Business owner is retiring
  • Poor financial position
  • Been on the market for a long time
  • Sale price has been repeatedly lowered
  • Disputes between the owners
  • Changing market conditions

6. Seek Alternatives To Cash. If you need to acquire a company quickly but don’t have the cash at the moment, look at alternative funding options, such as:

  • The Seller’s Assets. Make a list of all the assets you’re buying (along with any attached liabilities), and use it to approach banks, finance companies and factors (companies that buy accounts receivable).

  • Buy Co-Op. If you can’t afford the business yourself, try buying with someone else.

  • Lease With An Option To Buy. Some sellers will let you lease a business with an option to buy. You make a down payment, become a minority stockholder and operate the business is if it were your own.

Are you ready to acquire a company? Use these tips to ensure you make a smart investment.

Source: John Rampton is an entrepreneur, investor, online marketing guru and a startup enthusiast. He is the founder of online payment company Due. Known as a connector, Rampton was ranked No. 2 in Entrepreneur magazine’s Top 50 Online Influencers in the World, and named a marketing expert by Time. He currently advises several companies in the San Francisco Bay Area.