Buying a business to diversify ‘takes careful planning’

Posted 04/08/2010

A group of entrepreneurs have been speaking about the benefits and potential pitfalls of buying another business to help an existing company diversify.

In an interview with the Financial Times, Martin Jones – who owns successful company PH Jones Group – said it is important to consider the eventual aims of the acquisition.

‘Buying a business is easy. Getting it to work for you is very difficult,’ he pointed out.

Natasha and Chris Ashton, who founded insurance firm PetPlan, agreed and suggested looking for diversifications that support any existing relationships and business models.

For instance, Ms Ashton explained she and her business partner purchased a magazine in order to support their insurance activities and strengthen the brand, which is important for any entrepreneur.

David Yezbak, a business broker writing for the Augusta Chronicle, recently said acquiring an existing business could offer benefits over starting one up from scratch, as it will already be operating and have built up relationships with potential clients.