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Jym S.
Jym S.
Sydney South, NSW
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Hi,
What are the fine points that are to be looked into while taking over a new business to analyse its financial fitness, and know my actual ROI?

6 years ago

Responses

Hi Jym,

Nice mine-field here. Depending on the business and value purchasing for, it could be beneficial having a Due Diligence review done by a qualified accountant. They then have access to the current business records for review and reconciliation, like an audit. They can then prepare a report of findings from their review, to identify if the reported figures and record keeping figures match, and reconcile to bank accounts, supplier statements etc..
Be prepared to pay 1-2% of the purchase price of the business. It can be a worthwhile cost to make sure you are getting what you are paying for.
Note - generally you need to have provision in the purchase contract to undertake this process.
Speak to your accountant before going too far. We generally have access to industry information for business buying and selling, and can pull information from the selling report to advise.

Good luck with the purchase. Will be a stressful time, but can be very rewarding in the long term.

Todd.

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