I just acquired a business - here's what I learned

I just acquired Zite on the MicroAcquire marketplace. Have you considered acquiring a business to jumpstart your path as an entrepreneur? Here's a few tips from my experience (and feel free to AMA in the comments):

Know what you want

• Find out what kind of business you want to own and run
• Can you run it solo or do you need a team of experts
• Read about what it means to run a SaaS with recurring revenue or E-Commerce or a Content Business. Each will have their own challenges for you and your personality
• Of course you need to know your budget (or financing)

Be patient

• Monitor listings frequently
• Don't just go and buy anything, good listings come to those who wait
• I talked to the sellers of at least 10 different businesses before Zite came along which I would end up actually buying
• I was subscribed to MicroAcquire for 2 years before closing the acquisition

Prepare your due diligence

• Do not think of it as tech due diligence only. The other aspects of a business taken together are far more important than the stack and technical debt
• Understand the drivers and trends in the business (user churn, revenue growth, channel mix, ...)
• Ask for proof for seller's claimed numbers, past successes
• Asses risks for the business from market conditions, even the acquisition itself may pose a risk
• ... and so much more, make sure to be prepared because you need to be quick

Be quick

• When you find someone offering something you want, do not hesitate
• Make a first offer quickly, negotiate soon after, sign LOI, do your DD
• A single day spent pondering instead of acting may lose you a deal (I have been there!)
• But: do not let sellers push you toward a decision. You need to feel it is right for you.

Communicate openly

• Raise any concerns or doubts openly
• If you don't get straight answers, that'll tell you something
• Ask about past struggles in the business
• Sellers will be more honest than you might think

Seek counsel

• Depending on the size of the transaction it makes sense to bring in legal counsel
• You will find templates for legal docs, those can be sufficient for smaller deals

Want to know more about the experience? AMA in the comments.