Ensure complete due diligence is done
before any purchase or sale
Understand what you need to prepare to
get you the best offer
Gain a full picture of financials and
other aspects of the business for better decision making
Buying a business
Have you ever bought
a second-hand car from someone you didn't know?
A common experience
is to be wowed at the sales yard by sweet-talking salespeople paid a handsome
commission for selling lemons.
How
would you avoid this experience?
You could bring a
list of items to check. Even better, bring a mechanic with you.
Buying a business is
a similar process to buying a car - on a more significant scale.
When buying a
business, doing due diligence is crucial to avoid buying a lemon. You could
check websites that tell you what to watch out for. And for such a significant
purchase, you may get professional help.
Like slick used-car
salespeople, the financials of a business can also present a good front - while
hiding underlying problems.
On the other side of
the fence, selling a business is about showing prospects you have a solid
business - one worth paying top dollar for.
Selling a business
How much is a business worth?
This isn’t a trick question – but it certainly doesn’t
have a clear, defined answer either.
What does need an answer is this:
What are you doing to make sure all
your hard work will pay off when it comes time to sell?
And this is where I can help:
You see, what will help maximise the value of any
business is a strong, consistent and
accurate reporting structure.
This can show the performance of a business - from a
historical and current perspective. And also showing projections of future
performance underpinned by robust facts and assumptions.
A sale may be a distant object on the horizon, but an opportunity may arise at any time.
An investment in your business now could provide a substantial return in the future in terms of business valuation. It’s important to plan and be prepared.
In addition, I’ll also help you see how the non-financial aspects of the business affect the overall value of your business, such as:
- Strong credit history with suppliers
- Employee skills, pay, and loyalty
- Legal issues
- Not depending on one or two major customers, suppliers, or employees to run the business
- Competition
- Current and future demand for products or services
- Relationships with customers, suppliers, employees, and other people
Over the past 20 years, I’ve helped large and small businesses analyze financials to see if a business is profitable and worth buying. And for sellers, I’ve helped to set up systems to ensure financials are backed up by substance.
Want to make sure the value of your business reflects all the hard work you’ve put into it when it’s time to sell?
Interested in buying a business and need a hand to find out if it’s really worth the selling price?
Find out whether we’re a good fit. Then book in for a chat.
