Having bought three businesses and sold one, Salman Mahmood is already an experienced and bold entrepreneur – and yet he is still only 31.
His acquisitions have all been in the IT sector, reflecting his background in computer science. His first acquisition was a computer software company, while more recently he has bought a graphic design company.
You can be in business from day one. Setting up a business can be more risky
Salman Mahmood, IT business buyer
More control
When it comes to weighing up the relative merits of buying a business and starting up, Salman has no doubts on his preferred route.
“You have more control,” he says of buying a business, “especially if you find a business with a high turnover, good contracts in place, customers and goodwill.
“You can be in business from day one. Setting up a business can be more risky.”
However, Salman does concede that “finding the right business to buy can be very time-consuming.
“The key to being successful is finding the right business quickly and effectively.”
Doing so cheaply, is tricky.
“If you wish to investigate a business you need to employ an accountant and a lawyer – and that is where the process can become expensive.”
So how does Salman identify, from thousands of choices, the right business to bid for?
“I use the internet a lot,” he explains. “If I see anything that catches my eye, I request more details.
Once Salman has created a shortlist of opportunities he starts the investigation process.
“One of the most important things I look for is existing contracts with clients – especially with a service business because that is where the value lies.
“I ask myself: what will be the implications for the business if the client goes?"
He also stresses that the right accountant or lawyer can be the difference between buying successfully or not.
“If a solicitor takes too long in cementing the deal you run the risk of being outbid by a rival.”
