Buying a business can be a stressful and risky time. It is important to get great advice. I believe that when it comes to your accountant , it’s wise to choose one who specialises in helping people buy businesses. The following three scenarios prove my point.
I think that when it comes to buying a business an accountant can be like making sure you have the right life jacket.
Imagine you are out on the open seas in a small boat. You aren’t wearing a life jacket. But the weather is fine now so no worries. However, soon after a storm closes in, the waves get bigger and then your vessel capsizes. Bet you wish you had found a life jacket earlier – it’s too late now.
I’ve worked with people who have bought a business and gone through the whole process using a combination of the business broker, their lawyer, their banker and their own nous. And sometimes that works fine for them. Just like how most of the time you don’t need that life jacket – until you really do.
Buying a business can be expensive. But the cost of getting good advice is nothing compared with buying a business that isn’t as good as it was cracked up to be.
An accountant who is a business buying expert is worth involving early on. They can help you ask the right questions, avoid many risks (including over-paying) and structure the purchase properly for asset protection and tax. Finding out that the projections were wrong six months in can leave you under water, and wishing you’d put that life jacket on earlier.
You go looking for a life jacket while you are cruising out of the harbour. You find one – but it’s four sizes too big, the zip is broken, and it has a pretty overpowering smell of mould. But it’s better than nothing.
Let’s say you are thinking about buying a business. You go see the local accountant because you figure one accountant’s as good as the next one. Even if they only help one or two clients a year buy businesses and most of their work relates to rentals.
Yes, they can give you advice about what to look for when buying the company. And there’s a decent chance most of the advice will be correct. But do they understand the buying process properly so you can avoid all the most common risks? Can they help you get that deal over the line? What about helping you get the best finance deal? Sometimes there’s some time pressure in the process – can they keep up? Will their service be enough to keep you afloat? Or have you taken an unnecessary risk? And when that wave comes will your jacket will be too big and slip off?
In this scenario you have covered some of your bases by getting advice, but sometimes good is the enemy of great, and your new business might not be in as safe hands as you think.
You’ve brought your own life jacket, the zips all work, it even has a whistle – perfect. It keeps you safe no matter what the sea throws at you.
You are far better off finding an accountant who you trust, who can give expert advice about buying businesses, who has time for you and is invested in making sure you have the skills to run a good business.
Your life jacket should make you feel safe so you can step into the unknown with your new business confident that you’ve done all you can to protect yourself. Can you afford not to take the safest option?