I was just reading an old, old manual for buying businesses. It dates back to the nineties at least probably before.  So the manual, which was about 500 pages long has huge schedules and forms for filling out characteristics and details of your prospective business to buy. For example things like the target company’s accounting policies, government regulations, OSHA issues, inflationary adjustments, internal controls, etc. etc.  I had to laugh. I knew the author and he did know what he was doing,  but the myriad forms were so clumsy and useless that the manual was not practical at all. To be sure the document was written before the internet revolution and so the term “user friendly” was not in anyone’s vocabulary.

Now don’t get me wrong, there is a time and place for many of these details. If fact the due diligence process may cover many of them. When I was learning the business I read a ton of materials on buyouts and buying businesses. I even spent big bucks on a legal volume on mergers and acquisitions. Did I use any of it? Hardly. Once in a while you encounter a deal that somehow infringes on SEC regs or the Glass Steagall act, but that is very rare.  More likely you will want to brush up on Reg D requirements for taking on investors in case you want to raise money. However even that is rare unless you want to peddle a big private offering.

So there are plenty of armchair professors in this business. The fact is, when it comes to buying businesses, there is not much new out there over, say, the last fifty or sixty years. Not even private equity funds which have further complicated the mess. In the 1980s “leveraged buyouts” became the new term of art as if they just invented a brand new financial structure that nobody ever heard of.  If you want to go back to the roots of the industry do a search on Royal Little and find his book on Amazon. How to Lose $2,000,000 and Other Valuable Advice (I think it was updated to $100,000,000 because it was written so long ago).  Royal Little was the founder of Textron and of course Textron was a company that built itself through acquisitions. He also founded a small buyout company that did structured deals with many layers of debt and equity (ie. an LBO).  The This was in the 1960’s. Read it and you will realize who the father of leveraged buyouts might be.

Which is to say that there are many documents and books written about the science of buying companies. The problem is there is way to much science and very little condensed and concise actionable knowledge. This is where I come in. There is so much noise to get rid of in this industry that I have thrown out a huge chunk of the last sixty years of knowledge and made sure I teach only the skills that get us from point A to point B.