Happy New Year – Have You resolved to Buy a Business This Year?
Ok, so the true new year is 30 June as we all know. The party's over, hangovers recovered, and resolutions are to be implemented. If you have resolved to work for yourself and are thinking about buying a business then you need one piece of advice before you do anything else:
Buying a Business? Call Us FIRST – Please!!
Why Bother When we Just Won't Understand the Amazing Opportunity?
My job as an accountant is to ensure you get the right advice to understand the possible outcomes of your decisions. It is not to tell you whether or not you should buy that "once in a lifetime" business opportunity. Buying a business is an exciting decision to make and believe me, as an accountant with many grey hairs, I do understand your excitement.
Unfortunately I have also witnessed business decisions go horribly wrong and the common issue with many of those disasters is not getting the right advice at the beginning.
What is Due Diligence?
At the core of your business buying decision should be facts and analysis. This is called Due Diligence and is where a good accountant can help you get the best outcome by ensuring you make a fully informed decision.
The purpose of all due diligence is to inform you, they business buyer, of as much information to enable you to make a fully informed decision about the business you are looking to buy. Your due diligence should be systematic and comprehensive and this is the reason you should call your accountant first. A good accountant will understand your position, your personality, and most of all the due diligence and acquisition process. While much of the due diligence can be undertaken by yourself, so cost should not be an issue, your accountant will guide you towards the questions you should be asking and help you understand the answers. Too often I find out about clients' buying businesses after they have finalised the purchase contracts and it is then often too late to ensure the due diligence process was sufficiently robust. When this happens I am reminded about Warren Buffet's that basically says:
"It's far better to buy a great business at a fair price than a poor business at a cheap price"
If you are serious about buying a business to support your financial and lifestyle objectives then get serious about how to achieve the best outcome. Don't cut corners with your due diligence and use the expertise of your accountant to ensure you properly understand the business you are considering.
CLICK HERE for our useful Due Diligence Checklist