Making your first acquisition can be exciting and scary in equal measure and, while you probably acknowledge that some mistakes might be made (entering the world of M&A is a learning curve, after all), your first deal is one you’ll be eager to get right.

That, of course, means you’ll need to undertake an exhaustive due diligence process to ensure any potential targets don’t have too many skeletons in the closet and that you’re not acquiring a failing business or one that won’t deliver value.

However, beyond the financials, you’ll also need to ensure that the business is the right fit for you strategically and personally. Just because a company has solid financials and good growth prospects, that doesn’t mean that it’s the right acquisition for you, or that you are the right owner for the business.

Here are a few things to consider when deciding whether a company is right for your first acquisition.

Are your skills transferable
One of the great things about acquisitions is that they enable owners to quickly grow their business beyond their core product or service offering and expand into new markets and sectors. If that’s why you’ve opted to make your first acquisition, then it’s a completely legitimate strategy and one of the best ways to go about expanding your business.

At the same time, it’s important to recognise that your skillset may have limits and that you shouldn’t take on a task to which you are completely unsuited. For that reason, even if you are expanding beyond your core business, it’s wise to consider an acquisition that might enable you to use some transferable skills.

Consider how your skills could be proactively used to benefit a potential acquisition and how your expertise and experience could be applied to a business outside of your core operations.

Does it have potential for the long term?
The world of small business is full of fads and trends. Some of these stick around, but others fizzle out as quickly as they appear. As far as first acquisitions go, jumping on an emerging trend isn’t necessarily inadvisable, after all you might get in on the ground floor of the next big thing. But it’s important to not simply get sucked into something that is going to fade away in a few months.

If a business you’re looking to acquire is part of an emerging trend, look carefully at whether it has the hallmarks of long-term success. Does it have solid customer base with potential for further growth? Is there strong, sustainable demand for its products or services? Is there a sensible long-term business plan in place? Is there reliable, recurring revenue? If it has all these things, then that points to a business with staying power.

Are the personnel right?
Just because a business has a great product or idea and is in a sector that you feel you and your company could adapt to, that doesn’t mean everything. A business might seem like the perfect fit on paper, but if their employees can’t work with you and your team, then it’s just never going to work.

While you can of course make changes after you’ve taken over a business, replacing the entire staff is not something you want to do, nor something that would bode well for your ownership. Therefore, you’ll need to ensure that you can work with the bulk of the people at a target business.

Take some time pre-acquisition to meet as many of the key people as possible and make sure that you are certain that you can have a rewarding, long-term working relationship with them.

Does it excite you?
A business may tick all of the boxes we’ve listed above, but if the thought of owning it doesn’t excite you, do you really want to buy it? While this may seem like a complete intangible, it’s well worth considering whether a target business has that “x-factor” that really stands out for you.

If you’re excited by the prospect of taking over a business and making it your own, then the chances are you’ll bring more passion and dedication to your role and potentially be a more successful owner as a result.