Make sure you don't fall into these common traps.

1. You pay too much

The most important part of the deal when buying a company is what you agree to pay when you go in. The reason private equity works is because they will always seek to pay the minimum price and they won't even consider looking at a deal that is overpriced (unless competitive ego gets in the way).

Don't get into a bidding war. Don't buy into the Seller's or Broker's stories. Don't pay more than you can afford to finance. And do negotiate hard and get the lowest price you can. It's simple common sense but the lower price you get going in, the more profit you make coming out. That's just good business.

2. You have no experience in that industry

Sometimes it's great to have a fresh view brought into a company from another industry. However, if you don't know the industry then you can easily underestimate timings, costs, salaries and the competition.

If you're set on entering into a new market then do your research first and ideally bring along people with experience in that arena. You may be the exception who bridges the gap and moves from one industry to another successfully but that road is littered with the damaged careers of many who didn't.

3. You skip due diligence

Of course you're cost conscious when you buy a company and Due Diligence can seem like an awful lot of effort. However, buying a company without proper Due Diligence is taking a major risk.

If you buy a car without checking it over then you might find it has some faults that need additional work. If you buy a house without a survey you can find serious problems with damp and subsidence which could cost you a lot to put right.

If you buy a business without Due Diligence you could be taking on major liabilities (including tax, NI and VAT) as well as the potential for insolvency, personal bankruptcy or even criminal penalties as a director of the company.

There are so many things that can be hidden in the history of a business and its directors and as a new director you inherit all those past issues and become responsible and liable for them.

Always make sure you undertake proper Due Diligence and if you have any concerns about the company you're buying then either back out of the deal, get it checked by a lawyer or structure the deal in a way that protects you.

4. You forget about your own business

It can be very exciting chasing after acquisitions, making deals and completing a purchase. However, if you forget about the running of your own business during the 3 to 6 months you'll spend on the acquisition process then you might not have much to bolt it on to when you've finished.

When you're making an acquisition, you'll often have your best team members around you (your CFO & COO). Unfortunately, these can be the key individuals who keep your business running when you're not around.

It's tough to run a business and an acquisition but you need to juggle both at the same time otherwise you will ultimately lose out. It can be a good idea to use more external resources to help you through the process and free up some of your time.

5. You ignore the staff and the good ones leave

The process of being acquired can be very unsettling for employees in the target business and often they are left in the dark until after the deal is completed. They will know something is happening as their bosses run around with bits of paper and panicked expressions and they might deduce that the outcome will be bad. If they expect to lose their jobs then they'll start to look for new ones.

Unfortunately this can mean that some of the best staff can have already lined up new jobs before you acquire the business. And if they've not been treated well by the previous management then they may choose to leave soon after the deal is completed.

Another common issue is the lack of communication which often occurs after the deal is completed. The staff in the acquired company are left to wonder what's happening and given no direction. And it won't take long for the good ones to find new jobs.

As part of the acquisition process you must find out who the key employees are and engage with them as soon as you can (before or after the deal) and keep them enthused and motivated about the future of the new combined businesses. If you don't then you'll only have yourself to blame when you have a new business and no-one decent to run it.

6. You leave the business to fester

Along with a lack of communication after a deal is completed, the purchasing company often goes back to focussing on their own business and fails to properly integrate the business they've acquired.

When the previous owners have sold out, unless they are on clear incentive programs or earn-outs, they can easily lose their motivation to keep driving the business forward. They can decide that it's no longer their issue. It's now yours and they'll wait to be directed by you. And with no-one driving the business it won't be long before things start to slip.

As part of the acquisition process you must create an integration plan and implement it as soon as possible after the deal is complete. Make it clear and communicate it widely. If you don't then every day will see your new acquisition losing value.

7. You lose the customers to the competition

The customers are often the last to hear when a company is taken over. But as soon as they do they expect to be contacted and assured that business will continue as normal, or even improve.

If you don't communicate with the customers after the deal they'll assume you don't care about them. And then they'll go and find someone who does care about them, namely your competitors.

Many customers will have experienced the chaos that can ensue after an acquisition with confusion over accounts, contacts, deliveries and payments. They'll be watching to see how you handle these things and they'll be acutely sensitive to the fact that it's your problem and not theirs.

Again, create your integration and communication plans for customers well before the deal is completed and make sure you start implementing them immediately.

If you're thinking of buying a company then watch out for these seven howlers and make sure you protect yourself with these simple actions.