| Buying a business that is already up and running is, | | | | discussing business acquisition, by which they |
| if you have the financial wherewithal to do it, a | | | | mean the intangible and yet potentially very |
| great way to expand your existing business, or if | | | | valuable good reputation that a business may |
| you are looking for a quick route into the business | | | | have built up over its time trading. While it is true |
| world, it can be a short-cut worth taking. | | | | that positive brand image is a valuable asset, it is |
| It is not however without effort or risk, and the | | | | worth remembering that any negative |
| purchasing of a going concern should only be | | | | associations with the existing business or brand |
| undertaken after much due diligence and sensible | | | | could be extremely hard to shake. |
| forethought. Before jumping in with both feet it is | | | | 4. Ask the question. Don't make assumptions |
| wise to stop and consider whether business | | | | about why a business is being sold; ask. The |
| acquisition is actually the right route for you. | | | | business may have hidden difficulties or financial |
| | | | problems that are not immediately apparent. |
| 1. Take advice. It probably goes without saying | | | | 5. Inspect the figures. All businesses will have |
| that major financial actions such as buying a | | | | forecasts as well as a trading history for you to |
| company should not be undertaken without the | | | | view; look at profit trendsand projections as well |
| advice of an accountant; if you already have one | | | | asthe business operations, sales, costs and assets. |
| he will be in the best position to know how the | | | | It is vital that your accountants perform due |
| acquisition will affect your business. If you are just | | | | diligence before you commit. |
| entering the business world, do your homework | | | | 6. Prepare to adapt. You will of course be |
| before choosing; some accountants specialise in | | | | stepping into someone else's shoes if you opt to |
| business acquisition so look for someone who can | | | | buy a going concern, so do remember that as |
| offer the best help. | | | | well as an existing customer base there will |
| 2. Cost it out. Although a fast track into business, | | | | probably also be staff already in place, both |
| acquisition is often a more costly route; do | | | | existing customers and staff will be used to things |
| remember that you are paying for all of the hard | | | | a certain way and you may be forced to fit in |
| work of those who established the business, as | | | | with them rather than do things completely as |
| well as the firm's brand, reputation and customer | | | | you'd like; there are also legalities to consider, so |
| base. It is however very easy for those selling to | | | | read up on regulations such as TUPE before |
| you to price their hard work too highly, so get | | | | making any decisions. |
| your accountant to take a calculated, | | | | Taking on someone else's established firm is not |
| unsentimental look and things and to value the | | | | the short-cut it may at first seem, it is a good |
| business appropriately. | | | | way to add to your empire or jump start your |
| 3. Check the rep. The reputation, brand and client | | | | business life, but it is not without its own special |
| base that attaches a higher price tag to an | | | | set of hurdles and trials. The best way to ensure |
| existing business also has a possible dark side to | | | | that it works as an option for you is to be as well |
| it; accountants often talk about 'goodwill' when | | | | prepared as possible. |