You have decided to buy a business, you have been thinking for months that this is something that you would like to do. You have been searching for businesses on www.thebusinessplace.com and now you have found a business which sounds interesting. Now what, how do you proceed?
There are two important people who you need when buying a business, an accountant and a lawyer. Why do you need them and how do you find a good one?
If you have never purchased a business before, do you know what you are looking for? Do you know what information to look at? Do you know what the information that you are looking at means? More importantly, do you know what information to ask for what you were not provided? When it comes to due diligence, the information which is provided to you is more often correct, it is the information what the seller of the business did not provide to you that you need to ask for what is important. How do you know what to ask for?
When you pick an accountant, find out have they had clients who have bought and sold a business, have they done due diligence, what is the experience in this field. What type of businesses did they assist in? If you know of another person who bought or sold a business, ask who their accountant is and if they have experience. If you do not have an accountant, looking up in the Yellow Pages for an accountant of the directory of accountants on The Business Place. If they are advertising, call them up and ask about their experience. When it comes to accountants, don’t skimp. You get what you pay for. If you are looking for the cheapest there is, you get what you pay for. They probably do not have the experience. If nothing goes wrong, then you may have been lucky but if there is a problem, isn’t it better to learn in advance prior to buying business and finding out there is a problem. You can buy a business with a problem but did you know about it up front? You may want to factor that into the purchase price.
Experience is what is important, price should be secondary in my opinion. I am an accountant so I am biased however I have seen so many deals where the buyer did not hire an accountant and did it themselves and had to live with the consequences.
Lawyers are also important. They are the ones who you want to protect you. If you go to a real estate lawyer, they may not have the experience in dealing with businesses for sale. Again, you should be looking for experience because if you make a mistake or if there is a problem, you must live with the consequences if you could have been protected in the legal agreements. How do you find a good lawyer, ask your accountant, ask friends who use lawyers but ask the lawyer what is his experience in the buying of a business? If there is no experience or not much, do you want to be the guinea pig and see if your lawyer protected you or do you want to go to a person who has experience and knows all the right things to ask?
For both the accountant and lawyer, in my opinion experience is what you should be looking for as your primary criteria, price should be secondary.